literature review on effect of motivation on employee productivity

New work: New motivation? A comprehensive literature review on the impact of workplace technologies

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• Published: 04 November 2020
• Volume 72 , pages 59–86, ( 2022 )

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• Yvonne Schmid M.Sc. (hons)   ORCID: orcid.org/0000-0002-7531-7796 1 &
• Michael Dowling 1  

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The role of work and the characteristics of the workplace have changed greatly in recent decades. Today, new technologies enable an almost seamless interaction between machines and humans and allow teams in different countries and time zones to collaborate effectively. In this paper, we focus on the question of how job motivation is affected by technologies in the changing workplace. First, we review the state of research on job motivation and examine challenges in light of current technology trends and predicted developments for the workplace of the future. Job motivation is a well-documented construct connected to several company-relevant performance outcomes. However, our comprehensive literature review reveals a fragmented picture, with several disciplines addressing the topic from various points of view. We identify the four following schools of thought on workplace technologies and motivation: Technology as 1. background music, 2. hygiene factor, 3. motivator, and 4. influencer of mediators. While some scholars neglect technology in their considerations, others describe complex frameworks. This lack of unity reveals a further need for research. We suggest further research to develop holistic frameworks including moderators and to collect empirical data on the complex interactions between technology and job motivation.

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1 Introduction

New technologies are emerging at an ever-accelerating pace. Not only are voice-recognition systems, household robots, or new digital services, e.g., Amazon’s Alexa, having an impact on our private lives, but work environments are also changing significantly (Brynjolfsson and McAfee 2016 ; Cascio and Montealegre 2016 ; Leopold et al. 2016 ; Oldham and Hackman 2010 ). Technologies in the workplace, such as mobile devices, the Internet of Things, or AI-based applications, shape modern work processes and spaces.

Adopting new technologies and designing workplaces requires high investments and educated managerial decisions to integrate them into the companies’ strategies (Chan et al. 2007 ; Kampschroer and Heerwagen 2005 ; Schmid 2020 ; Vischer 2007 ). Meanwhile, labor shortages and other challenges in recruiting and retention management are affecting human resources (HR) and strategic management processes (Cascio and Montealegre 2016 ). The much sought-after high skilled workers demand modern and appropriate resources to work with. According to the Future Workforce Study 2016, “[n]early half of American Millennials (42%) say they’d likely quit a job if workplace tech didn’t meet their standards” (Dell Technologies and Intel 2016 ). As a result, it is necessary to understand the individual needs and perceptions to implement workplace technologies in an effective and strategic manner (Parker and Ohly 2008 ). These challenges raise the question of how technology in the workplace affects employees on an individual level.

Prior research focuses mainly on how workplace technology influences well-being, productivity, comfort, satisfaction, and territoriality and identity/belonging (Kim 2014 ; Vischer 2008 ). Most of these concepts are linked to employee motivation (Miller et al. 2001 ). The scientific discussion is dominated by works that focus on the changes in work content caused by technological change that lead to motivating aspects in the workplace. Regarding technology itself, technology demotivating employees is oftentimes a popular notion. However, according to an Eventboard survey among 1000 professionals, 38% claim they are motivated by innovative tech tools (Eventboard.io 2016 ).

Motivation is a widely accepted construct that leads to, among other things, better performance, lower fluctuation, lower accident rates (Hackman and Oldham 1976 ; Kanfer and Ackerman 2004 ; Maxwell 2008 ; Seeck and Diehl 2016 ), and job satisfaction (Taylor and Westover 2011 ). Brown ( 2012 ) even declares that “[m]otivation is one of the most critical elements within any kind of workplace.” Thus, employee motivation becomes a crucial strategic asset from a managerial point of view. With this aspect in mind, it might be useful to rephrase our initial question as:

How does workplace technology affect employee motivation?

There are many publications with practical recommendations on how to successfully design workplaces and integrate upcoming technology to keep employees motivated and productive (Barrett 2015 ; Caramela 2018 ; Hartog et al. 2017 ; Prince 2017 ). As most of these publications are merely based on anecdotal insights and the scientific field is fragmented, rigorous academic research is needed (Karanika-Murray and Michaelides 2015 ; Oldham and Hackman 2010 ; Parker 2014 ).

In this paper, we investigate existing research and assess whether current models and theories are suitable for explaining how workplace technologies influence employee motivation. This paper departs from prior studies by focusing on motivational theories and studies from the point of view of changing workspaces in the digital era in a structured and comprehensive manner.

In the following sections, we will describe the theoretical background of the topics at hand before introducing our approach based on the Comprehensive Literature Review as proposed by Onwuegbuzie and Frels ( 2016 ). After analyzing these results in depth, we will cluster them into the four schools of thought which are characterized by the nature of the technological influence on motivation: Technology as 1. background music, 2. hygiene factor, 3. motivator, and 4. influencer of mediators. We will then present implications for research and management and our conclusion.

2 Theoretical background

2.1 workplace technology.

There is no uniform understanding in the literature of what terms denote the technologies used in the workplace. For this reason, we coin the term workplace technologies to provide a common understanding for the following literature review. “Technology is a system-level variable or cluster of variables, which can be conceptualized as the techniques used by an organization or its subunits to transform inputs into outputs.” (Billings et al. 1977 : 319) Following this definition, technology in the context of organizations focuses on the value creation process in general. While this is also the case for workplace technologies, these can be divided into two categories. On the one hand, the “technical tools [are] needed to get work done, such as workstations, computers, or mobile devices.” (Schmid 2020 ) On the other hand, technologies incorporated in workplace design are a necessary situational aspect to support value creation, such as office design, room layout, or furniture. Accordingly, we define workplace technologies as the technologies that surround the employee and are needed to get the job done . Thus, we call the act of implementing such technologies and therefore shaping the physical work environment ‘workplace design’. While these definitions provide a good starting point to assess the topic, we will evaluate the terms used in the literature more closely in our analysis in Sect. 4.2 .

2.2 Employee motivation

Diefendorff and Chandler ( 2011 ) provide a comprehensive yet concise understanding of motivation, which we also base this work on: “ Motivation is often described as an unobservable force that directs, energizes, and sustains behavior over time and across changing circumstances.” While other authors provide different definitions, they all have in common that motivation is a construct or invisible driver, which induces behavior. Research in motivation and thus the origin of behavior in the workplace already began a century ago with the conception of humans contradicting the technocentric worldview that had been predominant at the beginning of the twentieth century (Komlosy 2014 ). One of the most cited research projects on workers from that time is the Hawthorne Studies (Landsberger 1968 ; Mayo 1949 ). These experiments observed how changes in the working conditions influence worker productivity. Researchers interpreted the results as mechanisms inherent in the individual and group structures affecting employee motivation.

These insights led others to shift the focus of their research from the physical aspects to the emergence of a more person-centered view on motivation in the following decades (Kim 2014 ; Veitch 2018 ). Groundbreaking theories like Maslow’s hierarchy of needs or Herzberg’s Two Factor Theory as well as various process theories focusing on the cognitive mechanisms leading to behavior emerged (Herzberg et al. 2017/1959 ; Maslow and Stephens 2000 ).

Herzberg’s Dual-Factor Theory is one of the most frequently cited theories in management research. Using the critical incidents method, he identified context factors as a hygiene factor, which leads to dissatisfaction when absent or unfavorably designed. However, sufficient workplace technology or other context factors may not lead to motivation (Herzberg et al. 2017/1959 ). While still one of the major theories taking external factors and employee motivation into account, it is often criticized for not being replicable with other approaches. Scholars suspect a methodological artefact (Hackman and Oldham 1976 ). However, the notion of adequate context factors merely preventing demotivation led to another direction for research.

In the following years, many researchers examined the impact of work conditions on health and how the work environment can influence humans negatively. For example, the Job-Demand-Control-Model and its successor, the Job-Demands-Resources-Model , explain the development of exhaustion based on an unfavorable working environment (=job demand) (Demerouti and Bakker 2011 ; Veitch 2018 ). Depending on the level of demands or resources available, a job can be perceived as straining/stressful or motivating (Karasek 1979 ; Parker et al. 2017a ). Physical and technological resources are part of this approach, yet the allocation explains negative results like stress rather than motivational aspects (Demerouti and Bakker 2011 ).

To consider individual differences in motivation and work design perceptions, Hackman and Oldham developed the Job Characteristics Model (JCM) based on a study with the Job Diagnostics Survey. Technology is not a central part of the model (Hackman and Oldham 1976 ).

The Self-Determination Theory (SDT) , which was developed a decade after the identification of the Job Characteristics, focuses on the person and conceptualizes intrinsic motivation achieved by addressing the needs autonomy, relatedness, and competence (Deci and Ryan 1985 ; van den Broeck et al. 2016 ). Prior content theories have already focused on needs or need categories. The underlying assumption in all cases is that a person is motivated to show a certain behavior in pursuit of satisfying these needs (Maslow and Stephens 2000 ).

Yet another perspective on the topic highlights the emotional component of feeling motivated. Mihaly Csikszentmihalyi coined the term “ flow ” in 1990 to describe a mental state in which a person is fully focused on a task. Flow occurs depending on individual readiness, tasks, and external circumstances (Csikszentmihalyi 2010 ).

Another wave of research that occurred in the 1990s and 2000s attempted to integrate existing research and create a broader perspective as each of the motivation theories and models focuses on a different aspect to study the concept of motivation (Diefendorff and Chandler 2011 ; Humphrey et al. 2007 ; Parker et al. 2017a ). In this period, empirical data provided new insights—particularly on the properties of extrinsic incentives. The results indicate ambiguous effects of material rewards on intrinsic motivation in so-called interesting or creative tasks (Amabile et al. 1986 ; Becker and Steele 1995 ; Deci et al. 1999 ; Heckhausen and Heckhausen 2010 ). For innovative behavior in particular, this connection plays a critical role in improving work results (Seeck and Diehl 2016 ).

3 Literature review

Due to the constant growth in publications in this research domain during the past decades, the existing literature is plentiful. To cope with the amount of research and achieve a comprehensive overview, we chose a structured approach. In response to calls for methodological rigor in management literature reviews (Bouncken et al. 2015 ; Fisch and Block 2018 ; Tranfield et al. 2003 ), we provide a structured review of motivation research publications and how they consider workplace technologies. Onwuegbuzie and Frels ( 2016 ) suggest that the Comprehensive Literature Review offers the opportunity to assess large volumes of publications in a transparent manner. To identify the key publications on the topic, we followed the four steps as outlined below. Figure  1 presents an overview of the details of each step.

Search strings and filtering methods produced 67 results for a comprehensive literature review (own illustration)

1. Search: To capture a broad range of results, we placed no prior restrictions on the definition of motivation or workplace-related influences. We chose general search terms accordingly. Search strings in different scientific databases with combinations of search terms related to the topic provided more than 200,000 results.

2. Filter: We filtered these results by assessing a representative number of abstracts (Krejcie and Morgan 1970 , as cited in Onwuegbuzie and Frels 2016 )—resulting in 1454 abstracts. Here, we relied on the databases’ results sorted by relevance.

3. Selection: Depending on the search engine, we found hundreds of results unrelated to the initial question. Many of these publications used the term “motivation” to describe the relevance of the topic. Others were closer to the topic at hand, yet unfit for shedding light on the current question. A recurring notion, for example, is the use of “workspace” to describe the radius of a robot arm. Other publications, some of which were works on the Technology Acceptance Model and its variations, referred to the mechanisms of how people can be motivated to use certain technologies at work. As the guiding criterion in this step was to select publications that cover aspects of employee motivation as defined above, we excluded those search results, which resulted in 205 useful publications.

4. Evaluation: We evaluated the remaining publications in depth to find out whether they addressed motivational theory in general and, specifically, the influence of workplace technology as defined above. During this assessment, we find that that a large part of motivation research has only marginally considered workplace technologies in their research. The authors mention ‘workplace attributes’ (Karanika-Murray and Michaelides 2015 ; Taylor and Westover 2011 ), ‘workplaces’ (Wong et al. 2008 ) or other situational aspects including technological elements. However, workplace technology is not at the center of attention but can instead be perceived as “background music” within these approaches. Thus, we excluded those publications. We also assessed reference lists to add further relevant publications (backward snowballing). Finally, we identified 67 publications dealing with job motivation and workplace technologies.

4 Analysis of the literature sample

In this section, we will analyze the 67 publications resulting from the above-mentioned procedure. To do so, we use an integrative approach including a systematic descriptive analysis to identify trends and gaps in this research area. Following a descriptive analysis on origin, publication date, and quality of the results, we will assess the contents in detail by mapping the perspectives on motivation and the theories applied as well as the different external factors. Subsequently, different perceptions of the relationship between workplace technologies and motivation are reviewed.

4.1 Descriptive analysis of the sample

From the 67 publications, the earliest works are from Denise M. Rousseau and Oldham and Brass applying the ‘Job Characteristics Model’ by Hackman/Oldham from the 1970s. Footnote 1 While office automation was a popular topic in the 1980s, works by Teresa M. Amabile on creativity and intrinsic motivation had an undeniable effect on motivation research in the 1990s. Most of the results though are from the 2000s and later, where the diversity of disciplines and origin increased.

Over time, the authors’ country of origin shifted away from the United States. Overall, the focus still lies on Northern America, with more than half of the authors working there, but widens to include other regions such as Europe, Southeast Asia, and Australia—particularly after 2010 (see Fig.  2 ). These results reflect the growing interest in motivating workplace design in developed countries.

First Authors’ origin over time shows rising numbers of non-US-based publications ( n  = 67)

Most publications come from rather traditional fields like psychology and (HR) management as well as from more recent disciplines like technology and facility management. Depending on the field, the perspective on the topic differs. While psychological and pedagogic publications have a stronger focus on the cognitive and affective processes, authors with a technological background tend to initially build on motivation theories but then focus on technological characteristics and details (Liu et al. 2018 ; Perryer et al. 2016 ).

Since we considered different databases, about one quarter of the results are not scientific journal articles, but books (reference books, textbooks, anthologies) or grey literature such as reports or comments. To determine the quality of the scientific articles, we consulted the most recent editions of the VHB Jourqual published by the German Association of Business Professors, the AJG from the British Chartered Association of Business Schools, and the JCR Impact Factor provided by Web of Science. The type and quality of the relevant results are listed in Table  1 .

To capture the diversity of the sources, we included all quality levels in our analysis; however, we consider the kind of publications when interpreting the results in the discussion.

The majority of publications (almost half of them) present a literature review, none of them using a structured approach. Eleven authors develop a new theory or framework, while others review the current state of research with a comprehensive overview of the situation. Especially worth mentioning is “Work Design Influences: A Synthesis of Multi-Level Factors that Affect the Design of Work” by Parker et al. ( 2017b ), as the collection and number of the sources is impressive.

Another third of the results contains quantitative analyses—with questionnaires as the primary method of choice. Depending on the underlying theory, the Job Diagnostics Survey (JDS), Work Preference Inventory (WPI), Work Design Questionnaire (WDQ), or a combination of items from these and other questionnaires were used. Other data collection methods include experiments or diary surveys; the critical incidents-method is a specific approach that is mostly used when reproducing data based on Herzberg’s Two Factor Model (Knight and Westbrook 2015 ). Few authors opted for a qualitative or mixed approach including thematic analyses of interviews and diary entries. Table  2 provides an overview.

Having described the quantity and structure of our 67 search results, we turn to the content of the publications in the following sections. To ensure a systematic process, we first outline the different types of technologies influencing job motivation mentioned in the literature. We will then show how the researchers conceptualized the relationship between those influences and job motivation.

4.2 Types of workplace technologies

Different authors provide different understandings of the influencing technologies—the terms used vary greatly. Table  3 provides an overview of these terms.

Many authors work with rather general terms to include physical environmental aspects. Expressions like situation (Heckhausen and Heckhausen 2010 ), job/work context (Herzberg et al. 2017/1959 ; Humphrey et al. 2007 ), physical environment (Demerouti and Bakker 2011 ; Mitchell 1997 ; Mitchell and Daniels 2003 ), physical working conditions (Knight and Westbrook 2015 ; Osteraker 1999 ; Rožman et al. 2017 ), work/office environment (Amdan et al. 2016 ; Barford and Hester 2011 ; Brenner 1999 ), or workplace design (Hancock 2009 ) are used. These terms represent a rather general understanding including—but not focusing on—workplace technologies.

Other authors narrow down their understanding: Technology (Amabile 1993 ; Methot and Phillips-Grant 1998 ; Morgeson and Campion 2003 ; Parker and Ohly 2008 ), technological factors (Das 1999 ; Parker et al. 2017b ), or technological environment (Jong 1989 ) are the terms used. Again, these publications do not explain their meaning any further or provide specific classification. This lack of definition can be vexing; however, as most of these publications are reviews or theory-building papers, there is no imminent need for operationalization.

Room appearance and layout: A popular approach for taking workplace technologies into account is observing reactions to office layout and equipment. While these technologies do not directly generate added value, they are an integral part of the workplace. One of the earlier examples is the research by Oldham and Brass ( 1979 ). They observed employees’ reactions after moving into an open office layout. Greenberg ( 1988 ), DeVoe and Prencipe ( 2001 ), and Lawrence and Nohria ( 2002 ) also focused on workplace technologies incorporated in workplace design, such as room size or furniture. Miller et al. ( 2001 ) chose a very specific approach and examined how the ‘sense of place’ influences motivation. As the perception of the physical environment differs, this concept may well hold explanatory power for how workplace technology affects workers in different ways. In a survey, they collected data on physical comfort, the perception of objects, furniture, and other environmental aspects (= sense of place). Their findings suggest a significant positive correlation between sense of place and motivation.

Samani et al. ( 2018 ) conducted a survey on the effects of transforming an open space layout by adding partitions. Their results show increased satisfaction and motivation. The new individual workstations offered the opportunity for workers to adjust their surroundings to their individual needs to a certain degree, e.g. the level of lighting. A similar approach was chosen by Knight and Haslam ( 2010 ). In their survey, they focused on managerial control of office space. Other researchers evaluate office layout or changing environments due to flexible work models. Research includes details on single office, multi office, or open space layouts (Kleibrink 2011 ) as well as interactive concepts like coworking spaces (Houghton et al. 2018 ). Olson and Tasley ( 1983 ) and Janneck et al. ( 2018 ) also included other working concepts, like home office or mobile working (= hoteling). These approaches are particularly popular in the research areas of facility and real estate management. They reflect the office trends shifting away from the individual office to open solutions with tele- and virtual working. While this approach is specific and comprehensive at the same time, details on technological tools and characteristics are lacking.

One possibility for ensuring both a comprehensive understanding of and a focus on technological aspects of the workplace is to classify them in a taxonomy . Rousseau ( 1977 , 1978 ), for example, applies James D Thompson’s technological classification scheme from 1967 that distinguishes between long-linked, mediated, and intensive technologies. Long-linked technologies describe a structured system with clear cause-and-effect-relationships. They are characterized by highly standardized sequential processes like an assembly line. Mediated technologies still contain prescribed processes; however, the tool to be applied must be chosen individually by the employee. With current technological advances, intensive technologies are on the rise. Here, the result of processes is not clear, and the appropriate technology has to be chosen individually (Thompson 1967 ). These systems are mainly found in jobs with creative tasks and human interaction, which are gaining in importance during the digital transformation (Frey and Osborne 2017 ).

In their survey on employees’ responses to environmental structures, Pierce et al. ( 1984 ) took a similar stance. To operationalize technology, they adopted a multi-dimensional approach, taking operations technology, material technology, and knowledge technology into account.

Another approach for classifying technology is to do so chronologically. Millman and Hartwick ( 1987 ) summarized different early ICT-applications, such as mainframe and personal computers, or teleconferencing, under the term ‘office automation.’ Cascio and Montealegre ( 2016 ) analyze ubiquitous computing (e.g., electronic monitoring systems, robots, teleconferencing, and wearable computing devices) as a further development of enterprise, end-user, and strategic computing.

Malone and Lepper ( 1987 ) categorize technologies and activities based specifically on how they influence motivation; they can be tools or toys. While tools are primarily used to achieve an external goal, toys are used for their own sake. The authors use an example to show that this classification is not necessarily distinctive. While most people use their computer to get work done, others take pleasure in mastering this tool (=toy).

Several authors opted for a focused approach and investigated specific technologies . One area worth noting is production technologies. Argote and Goodman ( 1986 ), for example, review how individuals react to the introduction of robotics, and Osterloh and Gerhard ( 1992 ) discuss the potentials of an anthropocentric production design.

Other research projects focus on applications in the area of information and communication technologies, such as hardware and software tools (Martin 2017 ; Pacauskas and Rajala 2017 ; Sidler 1984 ; Siemens 2005 ). Lazar et al. ( 2006 ), and Eden et al. ( 2010 ) examined (stationary) computers in the workplace while the growing mobile access to data plays a major role in a survey undertaken by Sinha and Arora ( 2015 ).

Although Benson and Dundis ( 2003 ) use the rather general term “technology” in their analysis, they discuss the specific implementation of ICT in nursing trainings. Housand and Housand ( 2012 ) also focus on training applications—placing emphasis on educational purposes. Other software applications include communication platforms (Brown 2012 ), enterprise management systems (Bala and Venkatesh 2013 ), email applications, or access to internet (Martin 2017 ). The easy and fast access to information due to these tools is mostly the crucial aspect influencing motivation and behavior.

A very young topic in the area of technology and motivation is gamification. It can be defined “as the use of game design elements in non-game contexts” (Deterding et al. 2011 ). This innovation deserves special mention as software applications and systems are designed using gamification elements specifically to motivate. The combination of rewards, collaboration, and competitive setting is crucial (Domínguez et al. 2013 ; Janneck et al. 2018 ; Liu et al. 2018 ; Perryer et al. 2016 ).

4.3 Types of relationships between technology and motivation

Ten publications adhere to Herzberg’s view on work conditions as a hygiene factor (Herzberg et al. 2017/1959 ). This paradigm highlights the constraining characteristics of workplace technologies. As these design elements and technological applications change over time, the original empirical results are called into question (Siemens 2005 ). Therefore, Knight and Westbrook ( 2015 ) reproduced Herzberg’s critical incidents method with data from telecommuters. Their results mainly correspond to those of Herzberg; however, communication and flexibility enabled by ICT became motivators highlighting the role of technology.

Other researchers follow the perspective of this model by viewing external aspects as restricting motivation and performance (Demerouti and Bakker 2011 ; Karasek 1979 ). By taking a diary approach, Lazar et al. ( 2006 ) examined frustrating effects when using computers. While the authors acknowledge that mild frustration can be motivating, they view most experiences as a problem in the workplace.

Ryan and Deci ( 2000 ) evaluate research on the Self-Determination Theory and view motivation as the individual need for growth that inner resources foster. Environmental aspects act as an infrastructure in which demands can cause negative results if too prevalent (Demerouti and Bakker 2011 ; Karasek 1979 ; Taylor 2015 ).

Another 17 publications claim a direct relationship between environmental influences and motivation. Ford ( 1992 ) explains the connection as follows: “Because humans are open systems whose existence, functioning, and development depend on material-energy and information exchanges with relevant contexts, the environment is always an integral part of their functioning” (Ford 1992 ). While the author does not elaborate on the relationship further, other researchers included this aspect in a similar manner. Several authors illustrate the situational (job context) influence on cognitive and motivational processes in their frameworks as an influence equal to the personal disposition/individual inputs (Barford and Hester 2011 ; Heckhausen and Heckhausen 2010 ; Houghton et al. 2018 ; Jong 1989 ).

While the nature of the relationship (particularly regarding the technological factors) is not described in detail, expectations may play a crucial role (Heckhausen and Heckhausen 2010 ; Jong 1989 ; Mitchell 1997 ; Mitchell and Daniels 2003 ). Other authors do not provide additional insights on the mechanisms of these processes either, but offer instead more details on the influences investigated. Das ( 1999 ), for example, developed a holistic framework describing several factors—technological, among others—that make up work design. Pierce et al. ( 1984 ) evaluated environmental structures on different levels (job, technology, work unit, leadership) and how these influence employee behavior (performance, absenteeism, intrinsic motivation, etc.). Results show that job and technology are the most important aspects explaining responses.

An approach to exploit this direct connection is utilizing workplace technologies as rewards. Perryer et al. ( 2016 ), for example, argue that one aspect of gamification applications is extrinsic prizes or badges—depending on the game design—that can be won. Other workplace technologies can also be perceived as a reward. In his survey on equity, Greenberg ( 1988 ) distributed status symbols, like remuneration and offices, among sales managers. Here, it is not the functionality of the furniture, but its symbolism that influences perceived fairness and extrinsic motivation (Vilnai-Yavetz et al. 2005 ). Elsewhere, using technology as rewards is mostly based on managerial recommendations, the scientific value of which is low (DeVoe and Prencipe 2001 ; O’Donovan 2002 ; Sidler 1984 ).

Miller et al.’s ( 2001 ) empirical findings suggest a significant positive correlation between sense of place and motivation. Interestingly, it seems that it is not the examined environmental aspects themselves that are the contributor to motivation, but the opportunity to control them. Personalization of furnishings and positioning of objects seem to be particularly important here. This hints towards a rather indirect relationship —researchers in 39 publications describe such mechanisms. In this perspective, some factors act as mediators between the external influence and the motivational processes. Depending on the conceptual framework, these mediators range from emotional aspects and needs to job characteristics. Table  4 provides an overview of the mediators with underlying frameworks and examples. To ensure a structured presentation of the mediators and allow for readability, we numbered each item in both the table and in the text. The numbers do not represent a ranking.

Perhaps the most obvious understanding of the indirect influence of technologies is that they can satisfy needs (1). Osteraker ( 1999 ), for example, claims that physical working conditions address physical needs. Other examples of needs include safety, esteem, self-actualization (Maslow and Stephens 2000 ), social interaction (Brown 2012 ; Lawrence and Nohria 2002 ), or the need to succeed (Nohria et al. 2008 ; Perryer et al. 2016 ; Sinha and Arora 2015 ). Brenner ( 1999 ) and Benson and Dundis ( 2003 ) provide a very clear and holistic perspective on how technology contributes to need satisfaction. They discuss the effects of workplace design elements, ICT, and training on employees in offices and the healthcare sector on every level of Maslow’s Need Hierarchy. They argue for example, that technology applied in training situations can provide the feeling of (job) security and the application of ICT enhance belonging to groups regardless of the person’s current location.

A wide array of publications—in fact the whole ergonomics research stream—deal with workplace technologies and how they affect the human body. As the focus here is anatomy, cognitive and affective outcomes—like work motivation—are mainly neglected. Paul ( 1997 ) provides an exception. He connects workplace design (including office equipment) with the notion that it can have pampering effects on need satisfaction—both on the human body and motivation. He assumes an inverted U-shaped correlation with productivity and employee motivation. The implication would be that a physically uncomfortable workplace design leads to dissatisfaction (which would be in line with the Herzberg’s findings), while a too ‘plushy’ workplace leads to employees feeling too comfortable and even lazy.

Another approach is to focus on the characteristics of the workplace rather than individual needs. Soon after Hackman and Oldham published the Job Characteristics Model, Denise M Rousseau analyzed the Job Characteristics (2 Task Identity, 3 Skill Variety, 4 Task Significance, 5 Feedback, 6 Autonomy) and how they interact with the (technological) environment (Rousseau 1977 , 1978 ). She found that the design of processes and technology use is correlated with Job Characteristics as well as with behavioral and attitudinal outcomes. At the same time, Oldham and Brass ( 1979 ) evaluated the internal motivation of office employees after moving from cellular to open offices. A sharp decline in motivation can be explained by a drop in the Job Characteristics.

Other authors argue that the Job Characteristics can be shaped by technologies: It is easy to agree with the claim that “autonomy originates in the workplace rather than the job” (Karanika-Murray and Michaelides 2015 ) when imagining that (mobile) access to data provides employees with the power to decide where and when to work (Millman and Hartwick 1987 ; Olson and Tasley 1983 ). In their experiment with CNC machine operators, Liu et al. ( 2018 ) designed a gamified approach to influence Skill Variety, Feedback, and Autonomy for workers. An app provides points and badges for achievements in different challenges. The data on 80 participants in total reveal a significant increase in motivation and job satisfaction.

To motivate employees, Cascio and Montealegre ( 2016 ) recommend implementing technologies addressing the needs for autonomy (6), competence (7), and relatedness (8) based on the Self Determination Theory. While physical design decisions can influence perceived relatedness, virtual technologies can also contribute to satisfying social needs. Housand and Housand ( 2012 ) suggest mentoring networks and online group tasks to promote cooperation.

In their Expanded Work Design Model based on the JCM, Humphrey et al. ( 2007 ) conducted a meta-analysis with 259 studies and 219,625 participants. While there were not enough studies available to make valid claims on the effects of work context characteristics on motivation, a positive effect of both work conditions and ergonomics on attitudinal outcomes and a negative effect of physical demand on behavioral outcomes can be assumed (Humphrey et al. 2007 )—this finding is in line with the publications we subsumed under the “technology as a hygiene factor” section. While physical demand in the form of insufficient and complicated workplace design demotivates employees, work needs to be challenging to a certain extent to motivate (Amabile 1993 ; Housand and Housand 2012 ; Malone and Lepper 1987 ). As too great a challenge or too difficult tasks can cause frustration and unchallenging work can be monotonous, Housand and Housand ( 2012 ) point out the opportunities online programs offer for students: gifted students can attend additional classes and solve harder tasks to achieve their optimal level of challenge (9). One of the mechanisms influencing this aspect is whether the technology at hand is associated with increased skill requirements (Methot and Phillips-Grant 1998 ).

Another mechanism is based on the information technological elements convey (see also technology as a reward). Recognition (10) as a facilitator for motivation is closely connected to feedback (5) and rewards as they can be perceived as symbols of recognition for the performance. Technology can be leveraged to provide recognition, for example, by implementing gamification elements containing achievements, badges, and rewards for individuals (Housand and Housand 2012 ). The act of implementing technologies and placing emphasis on workplace design can also provide recognition (van der Voordt 2003 ).

The feeling of control (11) over one’s individual environment can in fact enhance motivation (Samani et al. 2018 ) while a lack of control may lead to discomfort and demotivation (Argote and Goodman 1986 ; Bala and Venkatesh 2013 ; Knight and Haslam 2010 ; Osterloh and Gerhard 1992 ). A close connection to autonomy (6) can be assumed, as Cascio and Montealegre ( 2016 ) find: “Autonomy is the need to control one’s actions” (p. 356), and Housand and Housand ( 2012 ) even analyze the two concepts as one. Organizations can provide this feeling of control by implementing new technology and accompanying processes. For example, when introducing mobile devices, management can increase the autonomy by offering the free choice of where to work.

Technologies in the workplace can also motivate employees by enabling them to do their job. ICT in particular can provide smooth processes and motivate through means efficacy (12) (Eden et al. 2010 ). Martin’s ( 2017 ) findings point in a similar direction. She shows that technologies facilitating internal information flow increase employees’ introjected regulation and intrinsic motivation. On the other hand, technologies decreasing communication costs (e.g., groupware or intranet) cause negative effects as they provide information access to higher management and make employees feel less empowered.

Yet another approach to understanding motivation is to consider affective aspects. Emotions and other factors play a major role in the flow concept (13) (Csikszentmihalyi 2010 ). The concept describes a cognitive state of focus and enjoyment, like intrinsic motivation. This state can be facilitated by activities and individual preferences as well as by situational aspects. Veitch ( 2018 ), for example, claims that a positive working environment (with regard to lighting and ventilation) can lead to a good mood/pleasure (14) and engages employees with an “intrinsic interest in their work” (Veitch 2018 ). Easy-to-use technology can also contribute to achieving this state (Domínguez et al. 2013 ; Hancock 2009 ; Pacauskas and Rajala 2017 ). The ease of use is determined by—among other factors—an intuitive interface.

5 Discussion

We examined publications from the fields of psychology, management, educational sciences, and facility management. The results from our comprehensive review of the literature show that researchers hold different perspectives on the question of how workplace technologies influence employee motivation.

5.1 Map of the field

After reviewing the past research on work motivation and how it takes workplace technology into account, we propose clustering research into four paradigms. While the distinction is not mutually exclusive in all cases, most of the publications can be assigned to at least one of them.

1. Technology as background music: As described in the process of our literature selection, we find that traditional motivation theories tend to focus on motivation being a result of cognitive processes and individual preferences. Most of the content and process theories can be taken as examples here. Although they promote a person-centered view, situational aspects in general and workplace technologies in particular are mentioned. These researchers acknowledge the influence of these external aspects with varying specification, and some also examine them more closely (Sundstrom 2001 ; Taylor and Westover 2011 ; Wong et al. 2008 ). Yet, in their observations and frameworks, environmental aspects can be compared to background music, i.e., it is there, but in their approaches, technology does not make a difference. While these works were not at the center of our research as they do not focus on technology, it is essential to acknowledge this paradigm as it constitutes a major amount of research.

2. Technology as a hygiene factor: This is a popular paradigm researching the influence of workplace technology by focusing on the negative and health related effects. Mainly considerations based on Herzberg’s findings, the Job-Demands-Control-Model, and publications on ergonomics can be found in this paradigm. These publications all share the view that appropriate physical surroundings are necessary to prevent dissatisfaction and illness, but not to motivate (Herzberg et al. 2017/1959 ). This research was mostly published in scientific journals with an average JCR impact factor of 3.0. While this perspective certainly holds true to a certain extent, both the suspected research artifact of the critical incidents method (Hackman and Oldham 1976 ) and the emergence of new technologies (Knight and Westbrook 2015 ) suggest a more complex connection.

3. Technology as a motivator: A number of publications propose a direct (and positive) impact on employee motivation. Offering the latest gadget as an incentive for high performing employees poses a feasible solution for managers; however, these recommendations mostly do not explain which aspects of this approach are crucial, nor do they take the differences between intrinsic and extrinsic motivation into account. Here, mainly managerial recommendations view technology as a potential reward to improve (extrinsic) motivation and employee retention (DeVoe and Prencipe 2001 ; Houghton et al. 2018 ; Miller et al. 2001 ; O’Donovan 2002 ). Most of these publications are not peer reviewed research and those that are have an average JCR rating of 2.2.

4. Technology as an influencer of mediators : The majority of publications claim an indirect relationship between workplace technology and motivational outcomes. These frameworks mostly build on the Job Characteristics Model, the Self Determination Theory, and needs models (see Table 4 ). The two Job Characteristics ‘Autonomy’ and ‘Skill Variety,’ as well as individual needs are the most frequently mentioned mediators (Schmid and Auburger 2020 ). Researchers representing this perspective mostly based their assumptions on rigorous data and prior research results, which is also reflected by the average JCR rating of 5.0 for these articles. The consideration of a mediating factor can explain some of the complex structures of motivation; however, research does not (yet) follow a predominant paradigm regarding the connection between workplace technologies and motivation.

5.2 Practical implications

Regardless of the individual perspective on the topic, when implementing a new workplace technology or rethinking workplace design, management should consider the effects on employee motivation. These can even be addressed strategically (Kim 2014 ; Mitchell 1997 ; Schmid 2020 ). The literature shows that by choosing suitable technology, Job Characteristics, ergonomics, and needs satisfaction can be facilitated to motivate employees and thereby increase productivity, output quality, or achieve other strategically relevant outcomes. As research results are still fragmented and often include overly specific technologies or overly general constructs, it is difficult to make an overall recommendation. Yet, the results show two aspects applicable to most decision situations managers face when it comes to motivating workplace design:

1. Conscious technology implementation: Modern technologies offer great potential for new processes and interactions. Implementing a new tool has various consequences for other organizational features. While the decision for the “right” technology is important, the way it is implemented and perceived is crucial. How these innovations are perceived depends on aspects such as company culture, leadership style, individual skills, etc. We illustrate this consideration using the (previously mentioned) example of mobile devices: Having a smartphone at hand can empower an employee to access work-related information whenever and wherever he or she wants. This increases autonomy and therefore motivation. At the same time, the very same technology also enables managers to monitor their subordinates more closely and can increase the expectancy to be available at any time. This results in a lack of control for the employee and can cause demotivation (Schmid and Auburger 2020 ). In this case, leadership style mediates the connection between technology and motivation. In addition, the perception of technologies determines whether employees sense opportunities or threats in these innovations (Bala and Venkatesh 2013 ; Cascio and Montealegre 2016 ; Parker and Grote 2020 ). Eden et al. ( 2010 ) conceptualized this relationship as ‘means efficacy’ and showed that believing in the usefulness of a tool can increase efficacy and productivity. For management, this means that these and other aspects need to be considered consciously when implementing new technology or redesigning workplace.

2. Allow employee participation: Depending on the area of work and the individual preferences, every ‘ideal’ workplace looks different. Including employees in the design process can have various effects. First, they have access to a platform to express their individual needs and help select the workplace technology in a manner that achieves needs satisfaction. Second, by giving them control over design decisions, the design process will become motivating in itself.

Providing endless options to create individual workplace settings will be neither financially nor organizationally feasible. We suggest a predefined range of design features complying with company standards—a cafeteria-style workplace (Becker and Steele 1995 ).

Miller et al. ( 2001 ) show that providing choices—even on small and cost-effective features—can be applied successfully in many cases: choosing and arranging furniture or personalizing one’s desk can have a positive effect on motivation.

5.3 Agenda for further research

While this paper provides only a partial examination of the available literature, our structured approach offers a comprehensive picture of existing research. The 67 results show that a person-centered view is still the predominant paradigm. “This is unfortunate, as research in other areas has documented the importance of both the social environment and work context for a wide range of outcomes” (Humphrey et al. 2007 ). The number of calls for research on a holistic perspective is already on the rise. Drawing on these calls and the results presented, we propose the following research questions for future topics:

How can different types of workplace technologies be classified?

When collecting research on the effects of workplace technology, different disciplines address the topic from their individual point of view. The result is a variety of terms and concepts attempting to describe the external influences on motivation (see also Table 3 ). While many authors prefer a general understanding, such as context, situation, or environment, others narrow it down to work-specific terminology, such as workplace, workspace, job/work design, or technology. Almost all these concepts lack a clear and universal understanding.

In this paper, we have already provided a definition of workplace technology. It provides a broad understanding of technology, that is quite suitable for the purpose of this study. However, a taxonomy would offer the opportunity to change the focus of the investigation without changing the terminology. Only a few researchers worked with a clear system that included different technologies based on their functionality or effect. While the approach pursued by Millman and Hartwick ( 1987 ) or Cascio and Montealegre ( 2016 )—to classify technology according to its evolution—is intuitively understandable, it focuses on a certain kind of technology and ignores others. In the aforementioned publications, the focus lies on ICT, while production technologies or ergonomic aspects are neglected. On the other hand, James D Thompson’s technological classification applied by Rousseau ( 1977 , 1978 ) and Pierce et al. ( 1984 ) focuses on the way technology influences processes and tasks. This kind of taxonomy offers the inclusion of various workplace technologies. As the focal point lies on value adding processes, namely ergonomics and real estate, aspects such as office design are not considered.

Providing a comprehensive categorization is challenging, especially at a time when boundaries are blurred and workplace technologies are becoming more diverse than ever before. Yet, achieving this might just be the cornerstone on which to build linking conceptualization.

How do new technologies influence the workplace and therefore affect employee motivation?

Conceptualizing technology influencing mediators seems the most promising perspective of the four schools of thought outlined above. Scholars representing this perspective mostly base their arguments on rigorous research and complex models. However, a holistic framework including both the specifics of workplace technologies and motivational outcomes could help to explain the complex interrelationships. As these concepts are still rare, we recommend combining existing theories and frameworks. Some authors have already made promising advances here. Parker and Ohly ( 2008 ), Diefendorff and Chandler ( 2011 ), Taylor ( 2015 ), and Humphrey et al. ( 2007 ) propose multi-level frameworks including some workplace design characteristics and individual outcomes. These frameworks offer insights on interdependencies between individual, organizational, and external factors. However, the role of workplace technology remains vague.

The paths between workplace technologies and individual outcomes lack understanding (Parker and Ohly 2008 ). Therefore, we propose empirical research based on the insights described in this paper. As prior research has been predominantly quantitative and focused on correlations, qualitative approaches like case studies can help to gain a better understanding of causal relationships.

How do moderators affect the relationship between workplace technology and employee motivation?

Having shown that holistic frameworks are necessary to understand the complex relationship between workplace technology and employee motivation, we would like to emphasize the role of moderators. In our example about the mobile devices, leadership can affect perceptions of the impact workplace technologies have on motivation. This and other organizational aspects have already been examined, such as coworkers or leadership (Amabile and Kramer 2010 ; Csikszentmihalyi 2010 ; Karanika-Murray and Michaelides 2015 ; Maxwell 2008 ), processes or reward systems (Seeck and Diehl 2016 ; Wright and Cordery 1999 ), or organizational climate (Ferris and Gilmore 1984 ), as well as extrinsic workplace attributes, e.g., pay, job security (Amabile et al. 1986 ; Deci and Ryan 1985 ; Taylor and Westover 2011 ), or tasks (Hackman and Oldham 1976 ; Luczak et al. 2012 ; Medsker and Campion 2001 ). These authors provide insights on the role these organizational factors play regarding employee motivation, whereas most of the research excludes workplace technologies.

Other potential moderators might be socioeconomic or cultural aspects. Some authors assume that the relationship between workplace technology and motivation is determined by age. Based on empirical data on more than 3000 managers and professionals, Wong et al. ( 2008 ) identified age-related differences in motivational drivers. Members of the generations X and Y were found to be more motivated by progression and an affiliative workplace than Baby Boomers. Barford and Hester ( 2011 ) support these findings. Moreover, work environment demonstrates a higher overall relevance (after compensation) for the younger employees (Rožman et al. 2017 ). One of the reasons for this might be that the ease in handling technology and the accompanying high speed of communication make the younger generations seem more demanding. Kanfer and Ackerman ( 2004 ) argue in a similar manner: “The differences in work motivation as adults age pertain mainly to the impact of age-related changes in competencies and motives on motivational-processing components.” Being confronted with new technology can therefore cause a dissonance between competences and demands, which might lead to behavior aimed at protecting self-concept rather than progression in later stages of life (Kanfer and Ackerman 2004 ). As these insights are mainly assumptions at this stage, further research on this topic seems both interesting and necessary.

Which aspects of new technology influence the individual work organization and how?

As outlined above, existing research discusses either vague concepts of workplace design elements or the effects of specific technologies. These mostly include office design and ICT applications. The motivational impact of other upcoming technologies lacks scientific understanding and offers a wide field of research opportunities: production technologies like automation systems or robotics as well as promising applications of artificial intelligence, like voice recognition systems, personal virtual assistants, or virtual/augmented reality applications. We believe that these technological trends have unprecedented qualities. In the era of ‘Industrie 4.0’ and ‘Made in China 2025,’ everything is connected and technology is ubiquitous (Brynjolfsson and McAfee 2016 ; Cascio and Montealegre 2016 ; Parker and Grote 2020 ). While this leads to a significant increase in collaborative types of work, these new technologies allow greater opportunities for individualization and autonomous work organization as well (Brown et al. 2017 ). The amount and velocity of new skills needed is greater than ever before (Frey and Osborne 2017 ; Koetsier 2018 ; Leopold et al. 2016 ). To understand these technologies and how their characteristics affect work motivation, we suggest further research. Empirical data on different use cases is necessary.

6 Conclusions

In this paper, we developed a research agenda to include workplace technology in motivation research. No matter how workplace technologies are defined, many researchers emphasize the need for individualization. What one employee perceives as the optimal workplace design might be perceived as dissatisfying to another. The person-environment fit plays a major role (Samani et al. 2018 ). The toys vs. tools approach from Malone and Lepper ( 1987 ) and research on the ‘sense of place’ (Miller et al. 2001 ) shows how technologies can be perceived individually and help to explain different effects on employees. Current and future technologies provide individualized solutions and applications, and therefore the opportunity to address individual needs and motivation in the workplace. The advances in robotics, ICT, and artificial intelligence can pave the way towards motivational workplace design, instead of acting only as a restriction to change processes and job characteristics (Daugherty and Wilson 2018 ).

The highly volatile job market and fast changing environment pose increasing uncertainty for individuals and a need for lifelong education. With creative tasks and knowledge-based jobs on the rise, creativity emerges as an essential requirement—employees need to be highly intrinsically motivated to meet these requirements (Amabile et al. 1986 ). Creating a motivating workplace can be a sustainable investment for a company’s decision maker. Whereas further research is needed, it is not necessarily the physical environment in itself that might be the motivating factor, but the way it is perceived and the power to influence it (Brill et al. 1984 ; Knight and Haslam 2010 ) as well as the way it shapes job characteristics and addresses needs (van der Voordt 2003 ). Both researchers and managers need to take these aspects into account to generate fruitful research and sustainable workplace strategies. Workplace technology needs to be more than just background music in the future.

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Acknowledgements

We wish to thank various people for their contribution to this project; Steffi Steinhauser and Julia Oehler for their encouragement and persistent help. Special thanks should be given to Suzanne Weinberger and the reviewer for their useful and constructive recommendations on this project.

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Schmid, Y., Dowling, M. New work: New motivation? A comprehensive literature review on the impact of workplace technologies. Manag Rev Q 72 , 59–86 (2022). https://doi.org/10.1007/s11301-020-00204-7

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Intrinsic Rewards and Employee's Performance With the Mediating Mechanism of Employee's Motivation

Faiza manzoor.

1 Department of Agricultural Economics and Management, School of Public Affairs, Zhejiang University, Hangzhou, China

Longbao Wei

Muhammad asif.

2 School of Public Affairs, Zijingang Campus, Zhejiang University, Hangzhou, China

Associated Data

The raw data supporting the conclusions of this article will be made available by the authors, without undue reservation.

The prime goal of this study is to analyze the impact of intrinsic rewards on the performance of an employee. It also focuses on the role of motivation of the employee as an intervening factor. To achieve this objective, data have been collected through the questionnaire method from small and medium enterprises of Pakistan. A total of 400 questionnaires were distributed to the target population, and 300 were received. To test the hypotheses, the confirmatory factor analysis and the structural equation modeling have been used. The main results of the study have shown a positive and significant impact of intrinsic rewards on the performance of the employee. Specifically, the study reveals that the motivation of an employee significantly mediates the association between intrinsic rewards and the performance of the employee. In the light of the findings, implications are outlined.

Introduction

It is a general presumption that the motivation of an employee plays a pivotal role in amplifying his/her productivity and performance. To attain maximum achievement in the organizations, it is inevitable that the employees must perform optimally. It is a unanimous consensus that workers will accomplish their tasks better when they are highly motivated. Particularly, in developing countries like Pakistan, the personnel are more inclined to perform when they get recognition from the management (Tehseen and Hadi, 2015 ). The recognition of their achievements may be translated into intrinsic rewards; and through these rewards, the employees may motivate and perform up to their maximum capacity. Earlier literature is evident that there is an affirmative connection between employee motivation and job performance. For instance, Kuvaas et al. ( 2017 ) discussed the role of employees, intrinsic and extrinsic motivation, and their performance in the finance trade sector and as store managers, Norway. Their study concluded that intrinsic and extrinsic rewards are considered a principal motivator for the employees. Before this, Grant ( 2008 ) explained that motivation results in instant performance and productivity by the employees, and as a result of motivation, employees are self-driven.

Every organization needs financial, physical, and human resources to achieve its targeted goals. It is possible only when motivated employees use their full potential to do the work. Kuvaas and Dysvik ( 2009 ) argued that employees who are highly engaged and more willing to do their work take responsibilities as motivated employees. Motivation is not clearly understood nor practiced. Knowledge about human nature is very important for understanding motivation but human nature is not as simple to understand because every human is different from others. Organizations are using different human resource tactics and practices to motivate their employees (Manzoor et al., 2019a ). Reward management system and participation of employees in decision-making are frequently used practices by organizations to accomplish their objectives (Güngör, 2011 ).

The reward management system includes intrinsic rewards and extrinsic rewards like salary, bonuses, recognition, praise, flexible working hours, and social rights (Skaggs et al., 1991 ). With the help of a reward management system, enterprises can appeal, retain, and motivate employees to attain high performance of the employee (Liu et al., 2008 ). Gabriel et al. ( 2016 ) examined the relationship between effective management of rewards on the performance of employees in the public service sector of Anambra state, Nigeria. They concluded that intrinsic rewards like employee development, recognition, and pay/salary have a significant and positive effect on the performance of employees in the public service of Anambra. They further deduced that the motivation of employees is one of the significant factors for all firms because it enhances the performance of the employee and the performance of the firm.

Based on the above literature, it is evident that intrinsic rewards are one of the main factors that influence the motivation of an employee that has subsequent effects on amplifying the performance of the employee.

Small and medium enterprises (SMEs) are considered as the fundamental tool for economic growth, and they are playing an essential and vital role in the economic and social configuration of the nation (Ahmedova, 2015 ; Manzoor et al., 2021b ). The worldwide perception of small and micro-businesses or firms has reached noteworthy importance in the economic progress of a nation (Kuzilwa, 2005 ). It is generally claimed that there is no universally accepted definition for SMEs. In fact, it is difficult to adopt a universal definition for SMEs due to differences in firm size, sectors, culture, and the development status of economies in which SMEs operate (Kushnir, 2010 ). Gibson and Van Der Vaart ( 2008 ) proposed a new quantitative formula for defining SMEs that takes into account the revenue of a company and the country-specific economic context in which the SME operates. The definition of SME as defined by the Government of Pakistan is “SMEs are enterprises whose employment size is up to 250, with paid up capital to Rs. 25 million and an annual sales value up to Rs. 250 million” (Perera and Chand, 2015 ). The report of the United Nations Industrial Development Organization (2002) defines SMEs in terms of the number of employees and classifies these SMEs in developing and developed economies. According to the UNIDO (2002), in developing countries, there are between 5 and 9 employees for small enterprises and between 20 and 99 for medium-sized enterprises (Abor and Quartey, 2010 ). Pakistan is a developing country that faced a lot of problems including the high unemployment rate, slow growth in the development process, and severe poverty (Manzoor et al., 2019b ). As far as the SME sector is concerned, it provides the framework for a developing and inclusive society through employment opportunities. It strengthens the ability among the members of societies to apply their human competencies and develops a strong association with socio-economic development (Van Kleef and Roome, 2007 ). Unfortunately, in Pakistan, there are some constraints in this sector, such as weak infrastructure, lack of financial resources, low financial allocation and low participation, lack of incentive for staff, and lack of political commitment. In such cases, the retention of workers in the enterprise is very challenging. To address these issues, this study is being conducted. Many empirical studies (Allen and Kilmann, 2001 ; Ajila and Abiola, 2004 ; Hafiza et al., 2011 ) have been conducted on reward system and employee performance. The study by Ajila and Abiola ( 2004 ) showed that reward package can influence on employee performance. Based on their findings, they concluded that reward system helps to increase employee performance by enhancing employee skills, knowledge, and abilities in order to achieve organizational objectives. According to the study by Allen and Kilmann ( 2001 ), reward practices play a vital role in improving employee performance and to achieve organizational goals. As mentioned earlier, many researchers have identified that employee rewards directly attach to employee performance. In contrast, if an organization fails to reward employees, it will directly affect the performance of the employees. Empirical studies divulge that an efficient reward system can be a good motivator to the employees, but an inefficient reward system can be a de-motivation to the employees in terms of low productivity, internal conflicts, absenteeism, high turnover, lack of commitment and loyalty, lateness and felling grievances. Therefore, an organization needs to develop a strategic reward system for employees in order to retain competent employees, which results in obtaining a sustainable competitive advantage.

Regarding the previous studies, the relationship between intrinsic rewards and employee performance has been considered. However, many researchers have argued that money is not the only motivator for employees to enhance their performance. Jovanovic and Matejevic ( 2014 ) argued that once the pay exceeds the subsistence level, intrinsic factors are the stronger motivators, and staff motivation requires intrinsic rewards such as satisfaction at doing a good job and a sense of doing something worthwhile. In contrast, there is an increasing interest and attention on the use of both extrinsic and intrinsic rewards as a performance-related stimulation. Especially in large organizations, they have diverse reward package, and there is a wide literature on their implausible influence in obtaining and retaining highly motivated employees through that. Despite the vast research on the impact of reward in large organizations, a small number of researchers have investigated the case of the SME sector in developing countries like Pakistan. This study contributes by filling the gap in reward literature in the context of the SME sector and identifies whether the SME sector employees in Pakistan value intrinsic rewards the most or not; it tries to explore the attitudes of employees toward the reward policy of their organization. This study is also important as it is relevant for understanding the reward preferences of the SME employees. To conclude, the results of the study may be helpful for exploring the utilization and motivational potential of the reward management in the SME sector of Pakistan. This study attempts (a) to identify the role of intrinsic rewards on job performance and (b) to focus on discovering that employee motivation mediates the relationship between intrinsic rewards and job performance. Therefore, this study is based on an innovative idea that aims to observe the supposed correlation, i.e., to observe the mediating role of employee motivation between the relationship of intrinsic rewards and job performance. The authors ensure that, if organizations recognize the worth of intrinsic reward actions as honestly as possible, they would get best performance from workers. The main objectives of the study are interlinked with each other because conventional motivation theories like the Motivation-Hygiene Theory by Herzberg (Herzberg et al., 1959 ) unanimously agree that intrinsic rewards have a positive impact on the motivation of the employees, and due to the motivation of the employees, the performance of employees may amplify.

The remainder section of the article consists of the following. The next section explains the point of view of prior researchers who have contributed to analyzing respective variables. Brief existing literature is reviewed followed by research methodology and data collection. Then, empirical results are discussed with the conclusion and future research.

Literature Review and Hypotheses Development

Intrinsic rewards and performance of employees.

Intrinsic rewards refer to those incentives that have been given to the employees of an organization. An intrinsic reward is an internal reward that employees achieve from completing their tasks or projects successfully. These rewards are mostly psychological and are based on the effort and abilities of a person. Intrinsic rewards elicit a positive emotional reaction and work to motivate employees to continue to improve as well as make lasting behavioral changes when needed (Ryan and Deci, 2020 ). For example, when someone completes a task successfully, they will often experience a sense of satisfaction and achievement. This intrinsic reward then motivates the employee to continue to complete that task successfully in the future to further experience those positive emotions. Examples of intrinsic rewards in the workplace include pride in your work, feelings of respect from supervisors and/or other employees, personal growth, gaining more trust from managers, doing work that is enjoyable, feelings of accomplishment, learning something new or expanding competence in a particular area, allowing employees to choose which projects they work on, and being part of a team. The prior studies are in favor of the positive consequence of a reward system on the performance of the employees. Devaro et al. ( 2017 ) conducted their research in California, and they examined the relationship between training and internal motivation in organizations (profit and non-profit). The study concluded that training has a high frequency in non-profit organizations, and these non-profit organizations have lower base wages as compared with for-profit organizations. According to the study by Tymon Jr et al. ( 2010 ), the intrinsic rewards experienced are a critical element in employee retention, satisfaction with the organization, and career success. Stumpf et al. ( 2013 ) focused on reducing employee dissatisfaction and withdrawal in major, consultant designed, change programs by increasing intrinsic rewards. The findings of their study showed that intrinsic rewards related positively with satisfaction with the organization and intentions to stay at both time periods, with programs supportive of employee innovation further enhancing employee satisfaction and retention more strongly during the change effort. Furthermore, Mosquera et al. ( 2020 ) evaluated the role of satisfaction with intrinsic rewards in the three largest real estate agencies in Portugal. The results of their study indicated that intrinsic rewards have a positive and significant impact on the job satisfaction of the employee. Bassett-Jones and Lloyd ( 2005 ) explained that intrinsic motivation and appreciation play a vital role in the satisfaction of employees rather than money and bonuses. Yang ( 2008 ) examined the individual performance and outcomes of his study and indicated that we cannot verify individual performance. Even so, he also claimed that if the performance of the employees is observable, then organizations can use direct bonuses or relational contracts to motivate them based on their performance.

Ajila and Abiola ( 2004 ) explained that intrinsic rewards have a positive and significant influence on the performance of the employee in an organization. The results further indicate that intrinsic rewards such as career development, responsibility, recognition, and learning opportunities are less influential on the job performance of an employee as compared to extrinsic rewards like pay, bonuses, promotion, and benefits. The employees prefer to get immediate monetary benefits as compared to the recognition of their works. Barber et al. ( 1992 ) determined that flexible benefits have a positive association with the performance of employees and satisfaction. Berdud et al. ( 2016 ) conducted their study in the healthcare sector of Spain and investigated the connection between incentives and internal motivation of the employees. They have collected the information with the help of interviews. The study concluded that doctors were intrinsically motivated due to two dimensions which included medical practice and pro-social dimension. Based on the above, we hypothesize the following:

H1: Intrinsic reward and employee performance have a significant and positive association.

Employee Motivation and Performance of Employee

The most significant outcome of motivation, arguably, is individual performance. In this regard, intrinsic motivation is posited to garner “the highest degree of effort” (Meyer et al., 2004 ), since it was related to high energy levels (Ryan and Deci, 2008 ) and persistence (Vallerand and Blssonnette, 1992 ). Besides, motivation is completely related to enthusiasm and commitment (Van Den Broeck et al., 2013 ), thriving (Spreitzer et al., 2005 ), and well-being (Nix et al., 1999 ). To energize workers and make them concentrate on their work in an inclusive manner, all these positive-affect states are theorized. Furthermore, to be positively linked to in-role performance in the domains of education, work, and physical (Cerasoli et al., 2014 ), there has also been evidence of a positive correlation between contextual work performance and creativity (Gagné and Deci, 2005 ). Furthermore, to boosting performance, motivation energizes a wide range of attitudes, outcomes, thoughts, and emotions. The key benefits of attitudes are the perceptions of autonomy and effectiveness (Cho and Perry, 2012 ). Yen and Tang ( 2015 ) investigated the association between electronic word-of-mouth motivation and hotel attribute performance. Zámečník ( 2014 ) suggested that different motivational programs can be organized for the same motivational group of employees. The motivation of the employees and their performance explained that internal and external motivations are important factors for employee performance. Sanyal and Biswas ( 2014 ) investigated the attitude of the employees of the software companies in West Bengal (India) toward performance appraisal. They found the best effects of employee motivation toward performance appraisal. Likewise, van der Van Der Kolk et al. ( 2019 ) examined the relations among various types of management control, intrinsic and extrinsic motivations, and performance in the public sector. The findings highlighted that intrinsic motivation enhances the performance of the employee. Zlate and Cucui ( 2015 ) revealed that performance is closely connected with motivation. His study is intended to present the motivation process within universities as a complex process, which leads to the performance of the personnel only if motivational mechanisms are known and properly applied by University managers. According to the study by Rita et al. ( 2018 ), work motivation has a significant effect on employee performance. Kuvaas et al. ( 2017 ) investigated the influence of internal and external motivations on employee performance and exposed that both internal and external motivations have a different effect on the job performance of the employee. The findings of the study showed that internal motivation was positively correlated with work performance and has a negative link with turnover intention and burnout. However, extrinsic motivation has a positive relationship with turnover intention and burnout and has a negative correlation with work performance. Kvaløy et al. ( 2015 ) concluded that motivation enhances the performance of the employee only after escorted by performance pay. Also, the performance pay reduces if it is not accompanied by motivation. The effect of motivation on organizational performance has been investigated by Osabiya ( 2015 ). He concluded that employees should be given the job he has been trained for. Motivated workers perform better than less motivated workers, because motivated workers have some sort of recognition and achievement through motivation. We assume that similar results would be found in the domain of work and thus hypothesize the following:

H2: Employee motivation is positively and significantly correlated with employee performance.

Intrinsic Rewards and Employee Motivation

A reward management system involves the policies, processes, and practices of the organization for rewarding its workers by their skills, commitment, contribution, abilities, and artifice. It is progressed within the reward philosophy, strategies, and policies of the organization and includes agreements in the form of processes, practices, structures, and procedures that will provide applicable styles and standards of compensation, benefits, and other forms of reward (Güngör, 2011 ). Reward Management System Tool includes both extrinsic and intrinsic rewards, which are also called financial and non-financial rewards. Extrinsic rewards are salary increase, bonus system, prerequisite, etc., whereas intrinsic rewards are; praise and appreciation, title and promotion, responsibility and authority, plague and certificate, education, participation in decisions, design of work, vacation time, social activities, the comfort of working place, feedback, flexible working hours, recognition, social rights, etc. (Yang, 2008 ).

A basic explanation of motivation is the capability to change behavior. Motivation is a drive that holds one to act because human behavior is directed toward some goal (Kleinginna and Kleinginna, 1981 ). Social cognitive theory claims that rewards given for the success of challenging performance standards may result in high motivation (Schunk, 1989 ; Netz and Raviv, 2004 ). Karami et al. ( 2013 ) determined the impact that a reward management system has on employee performance with the mechanism of the mediating role of employee motivation at Isfahan electric company. The results of their study revealed that reward management has a significant positive impact on the performance of the employee, and the motivation of the employee significantly mediated the effect of reward management system on employee performance. Stringer et al. ( 2011 ) explored the complex relationships between intrinsic and extrinsic motivations, pay satisfaction, and job satisfaction of the retailer who uses a pay-for-performance plan for front-line employees. The results provide some support for the complementary nature of intrinsic and extrinsic motivations. Intrinsic motivation was positively associated with pay and job satisfactions, whereas extrinsic motivation was negatively associated with job satisfaction and not associated with pay satisfaction. Likewise, Pratheepkanth ( 2011 ) assessed the reward system and its impact on employee motivation in commercial Bank of Sri Lanka Plc, in Jaffna District. The aim of his study was to investigate whether rewards and recognition have an impact on employee motivation. The overall findings of the study showed that rewards and recognition have a positive and significant impact on employee motivation. The results also revealed that staff and employees from non-white racial backgrounds experienced lower levels of rewards and motivation. Kuvaas ( 2006 ) suggested that employees will take more responsibility when offered developmental opportunities. Motivated employees via rewards are also more engaged and involved with their jobs as compared with employees with low motivation. Accordingly, we propose following hypothesis:

H3: Intrinsic reward is positively related to employee motivation.

The earlier literature has concentrated on different dimensions of motivation and its effect on the performance of the employee in the manufacturing sector and large organizations but according to our best knowledge, none of the studies have discussed this relationship in small and medium-sized enterprises. Also, this analysis has different methods compared to previous studies. This study fills the gap in the sphere of knowledge and addresses the role of intrinsic rewards in the performance of employee with the mediating mechanism of employee motivation in the SME sector of Pakistan. Thus, we assume that:

H4: Employee motivation will mediate the relationship between intrinsic reward and employee performance.

Figure 1 shows the conceptual model of the study, which has been constructed based on a literature review.

Conceptual framework illustrates the associations examined in this study.

Research Method

Participants and procedure.

To examine the objective of the study, a sample of employees of SMEs has been collected through the questionnaire. The survey was conducted from early March to late April 2019. These questionnaires were originally developed in both languages English and Urdu (national language) for a better understanding of the local entrepreneurs. Initially, 400 self-administered questionnaires were distributed among the employees of SMEs in Islamabad and Rawalpindi (cities of Pakistan). Study area is chosen due to the density of large numbers of enterprises, and it was convenient for authors to perform the data collection procedure. The SMEs involved in this study were cosmetics, electronics, food and beverage, pharmaceuticals, minerals, and construction. Almost 50 and fewer workers were working in every enterprise.

After the data screening, incomplete questionnaires and unengaged responses were discarded (25% rate); the remaining 300 questionnaires, i.e., 75% of the total participation rate of the respondents, were selected, which were complete in all aspects. The aim of the study and questions were clarified to the participants before giving them a questionnaire, which enabled them to fill the questionnaire easily. The questionnaire consisted of demographic information (control variables such as age, income gender, and education) of the employees and studied variables like an intrinsic reward, employee motivation, and employee performance. The single factor test of Harman (Manzoor et al., 2019c ;Sahito et al., 2020 ) was conducted, and the results showed that the percentage of variance explained by a single factor was far less than 50%, which mean that there is no threat of common method bias.

The total number of respondents was 300, of which 54.3% were males and the remaining were female. The greater part of the respondents (45%) held an undergraduate degree. Almost 26.7% of the age of the respondents was between 29 and 35 years. About 30% of the respondents had 25,000 and 35,000 (PK Rupees) per month income.

Intrinsic Rewards

Intrinsic rewards have seven items that are taken from the study of Özutku ( 2012 ), which were initially developed by Allen and Kilmann ( 2001 ). Followers were required to evaluate the intrinsic rewards system using a five-point Likert-type scale ranging from 1 for “strongly disagree” to 5 for “strongly agree.” Sample items included “Regular expressions of appreciation by managers/leaders to employees to acknowledge achievement of quality improvement goals.” and “Quality based promotions wherein promotions are based primarily on the achievement of quality-based goals as opposed to quantity-based goals.”

Employee Motivation

The evaluation of employee motivation was performed by six self-report items based on the prior measure (Cameron and Pierce, 1994 ), and we have retrieved relevant items from the study of Talukder and Saif ( 2014 ) and Kuvaas ( 2006 ). Items were ranked by a 5-point Likert scale, where 5 = strongly agree and 1 = strongly disagree. Items included “I feel a sense of personal satisfaction when I do this job well.”

Employee Performance

Employee performance was measured with the 7-item scale developed by Williams and Anderson ( 1991 ), which were previously used in the literature for the assessment of job performance (Arshadi, 2010 ). Workers were petitioned to rate their level of performance via a 5-point Likert scale, where 5 displays “strongly agree” and 1 displays “strongly disagree.” An example item is “My performance is much better than the same qualified colleagues.”

Control Variables

This study deals with four control variables, namely, age, gender, income, and education. In this study, we measured the age of the employee through categorical variables (1 = less than 25 years, 2 = 25–29 years, 3 = 30–39 years, 4 = 40–49 years, and 5 = 50 above years), employee gender (1 = male and 2 = female), income (1 = above 55,000, 2 = 45,000–55,000, 3 = 35,000–44,000, 4 = 25,000–34,000, and 5 = below 25,000), and education (1 = no education, 2 = elementary school, 3 = secondary/high school, 4 = bachelor/college, and 5 = master degree/University).

Descriptive and Goodness-of-Fit Statistics

SPSS software 22.0 and AMOS 25.0 were used for empirical analysis. Table 1 demonstrates the descriptive statistics, mean, standard deviation, Pearson's correlations, and discriminant validity of all the study variables. The findings depict a positive and significant correlation among all the variables.

Mean, standard deviation, correlations, and discriminant validity.

Bold values show discriminant validity and are greater than the squared correlations .

We have conducted a confirmatory factor analysis (CFA) based on exploratory factor analysis (EFA) and used the maximum likelihood estimate. Table 2 showed the findings of the goodness of fit indices of CFA, where the values of Goodness of Fit Index (GFI) = 0.897, Adjusted Goodness of Fit Index (AGFI) = 0.870, Normed Fit Index (NFI) = 0.945, Relative Fit Index (RFI) = 0.937, Incremental Fit Measures (IFI) = 0.972, Tucker–Lewis Index (TLI) = 0.968, Comparative Fit Index (CFI) = 0.972, Standardized Root Mean Square Residual (SRMR) = 0.064, and Root Mean Square Error of Approximation (RMSEA) = 0.057. All these values surpassed the good fit criteria. According to Bentler and Bonett ( 1980 ), the estimates for CFI and NFI should be equal or higher than 0.9 for a good fit, while X 2 /df should be not more than 3. Manzoor et al. ( 2021a ) and Qing et al. ( 2019 ) recommended the estimates for NFI and CFI to be above 0.8 for a good fit.

Goodness-of-fit statistics.

CFA, confirmatory factor analysis; Chi square/degree of freedom .

The convergent validity of the variables was estimated by observing the factor loading, composite reliability (CR), and average variance extracted (AVE) ( Table 3 ). We found that CR ranged from 0.83 to 0.90 for each factor from the results of Table 3 . These values are greater than the suggested cut-off point of 0.60 and confirm the existence of inner consistency reliability between each construct (Fornell and Larcker, 1981 ; Asif et al., 2019a ). According to Bagozzi and Yi ( 1988 ), the CR ensures the minimum cut-off of 0.60, whereas the AVE crosses the threshold of 0.50 (Fornell and Larcker, 1981 ). Table 3 shows that the value of alpha is above 0.70 (Cronbach, 1995 ), which represents the greater internal consistency of the constructs and validity. Hair et al. ( 2010 ) suggested that factor loading more than 0.5 is considered significant, and therefore, loadings provide a significant effect for each construct (Han et al., 2019 ; Asif et al., 2020 ). Thus, the measures do not have any slight problem with convergent validity.

Factor loading of indicators and overall reliability of the constructs.

AVE, average variance extracted; CR, composite reliability; CFA, confirmatory factor analysis; EFA, exploratory factor analysis .

To see the discriminant validity, the squared root values of correlations among the constructs are shown in Table 1 where all these values are greater than the inter-related correlations (Asif et al., 2019b ). Additionally, the measurement model (shown in Table 4 ) confirms the construct validity as suggested by Barroso Castro et al. ( 2008 ) and Qing et al. ( 2019 ).

Measurement model for explanatory variable (intrinsic reward), dependent variable (employee performance), and mediator variable (employee motivation).

IR, intrinsic reward; EM, employee motivation; EP, employee performance .

Hypotheses Testing

To test the hypotheses of the study, we employed structural equation modeling (SEM) using the maximum likelihood estimation in IBM-AMOS software.

Table 5 shows that intrinsic reward and employee performance have a significant and positive association. As evident in Table 5 , we found support for Hypothesis 1 (Standardized β = 0.46, t = 9.17, and p < 0.01). Hence, intrinsic reward has a positive and significant association with employee motivation (Standardized β = 0.50, t = 10.13, and p < 0.01); additionally, employee motivation and employee performance have a positive and significant correlation (Standardized β = 0.73, t = 18.69, and p < 0.01). Therefore, the findings of regression fully support Hypothesis 2 and 3.

Regression coefficients for a direct relationship of variables for testing hypotheses 1–3.

For testing Hypothesis 4 which is about the mediation effect of employee motivation between intrinsic reward and employee performance, we applied two methods suggested by Baron and Kenny ( 1986 ) and James and Brett ( 1984 ). The study of Baron and Kenny ( 1986 ) was concerned with regression weights and correlation of studied variable, and for full mediation support, four criteria should be met. First, the predictor variable (intrinsic reward) should have a significant relationship with a mediator (employee motivation). Second, the intrinsic reward should have a significant relationship with the predicted variable (job performance). Third, the mediator variable must be significantly correlated with the predicted variable. Lastly, in the regression equation, the direct association among explanatory variables and predicted variables must be insignificant in the existence of a mediator variable.

However, the mediation for the existing study is verified with the help of James and Brett ( 1984 ). They recommended adopting confirmatory approaches like SEM to test mediation.

With the recommendation of Wang et al. ( 2005 ), we prepared two nested models and compared them as presented in Table 6 . Model A is a hypothesized one that has a direct path from intrinsic reward (explanatory variable) to employee performance (outcome variable) and also integrated an indirect path from intrinsic reward to a dependent variable through employee motivation (mediator variable). Further, this model is compared by another model. Model B included an indirect path from the explanatory variable to the dependent variable. Table 6 showed that χ 2 difference is insignificant while comparing the hypothesized model A. This shows that Model A is the best-fitted model and confirmation of mediation.

Comparison of the structural equation model.

IR, intrinsic reward; EM, employee motivation; EP, employee performance; RMSEA, Root Mean Square Error of Approximation; TLI, Tucker–Lewis Index; CFI, Comparative Fit Index .

Furthermore, Figure 2 shows the SEM results where a path from intrinsic reward to employee motivation is significant (β = 0.59; p <0.01), whereas the path from employee motivation to job performance also shows a significant and positive association (β = 0.33; p < 0.05). From Figure 2 , it is evident that the direct path from intrinsic reward to employee performance (β = 0.07, p > 0.05) is insignificant and approves full mediation. In line with the above evidence, we performed bias-corrected bootstrapping and percentile bootstrapping at a 95% confidence interval with a 2,000 bootstrap sample (Arnold et al., 2015 ) to assess complete or partial mediation. As recommended by Preacher and Hayes ( 2008 ), we measured the confidence of the interval of the lower and upper bounds to assess the importance of indirect effects. As shown in Table 7 , we found that the indirect effects of employee motivation on the intrinsic reward and employee performance (estimate = 0.191, p < 0.01) are significant. The direct relationship between intrinsic reward and employee performance (estimate = 0.067, p = 0.100) is not significant and supported Hypothesis 4 with complete mediation.

Structural equation modeling mediation effects. Significant at ** p < 0.01; *** p < 0.001; NS, non-significant.

Results of bootstrapping for standardized direct, indirect, and total effects of the model.

IR, intrinsic reward; EM, employee motivation; EP, employee performance; LLCI, lower level of confidence interval; ULCI, upper level of confidence interval. Sig:

The key aim of this study was to investigate the association between intrinsic reward and employee performance in the presence of employee motivation as a mediator among SME employees. This study has been conducted in the SME sector of Pakistan, and very rare empirical studies have been scrutinized the reward system and its effects on employee performance. This study fills this gap by examining the association between intrinsic reward and employee performance in the context of the SME sector in Pakistan.

In this study, results revealed that the relationship between the intrinsic reward (independent variable) and employee performance is positive and significant. These findings were confirmed by previous studies of Pierce et al. ( 2003 ), Cerasoli et al. ( 2014 ), and Ajila and Abiola ( 2004 ). Furthermore, the outcomes of the existing study revealed that intrinsic reward has a significant and affirmative correlation with employee motivation. These findings allied with the past studies of Cho and Perry ( 2012 ), Kuvaas et al. ( 2017 ), and Fisher ( 1978 ). Also, employee motivation (mediator variable) and outcome variable employee performance also have a significant and positive association, and these findings are consistent with the previous studies of Mak and Sockel ( 2001 ), Bedarkar and Pandita ( 2014 ), and Khan et al. ( 2017 ). The results supported the hypotheses that there is a positive association between intrinsic reward, employee motivation, and employee performance.

Motivation in the workplace has been traditionally understood in terms of extrinsic rewards, be in the form of pay, benefits, bonuses, awards, or career advancement (Rebitzer and Taylor, 2011 ). However, intrinsic rewards play an important role in a workplace motivational strategy, which makes employees more motivated to work. Many people respond well to tangible intensive rewards, such as a monetary bonus. However, once the reward is depleted, the motivation may also dwindle, so a strong strategy uses both intrinsic and extrinsic rewards to keep workers motivated throughout their tenure (Vallerand and Blssonnette, 1992 ). The results of our study reveal that intrinsic rewards are vital to motivational success because they offer long-term, non-tangible benefits that are usually not very costly to achieve and can be repeated over and over again successfully.

The mediating effect of employee motivation on the relationship between intrinsic reward and employee performance is our main finding. The result demonstrated that employee motivation has a positive mediating effect in the association between intrinsic reward and employee performance. These results are in line with a previous study of Güngör ( 2011 ); he has conducted his study on global banks in Istanbul. This suggests that employees with the best reward system and motivation process can be more satisfied and will exhibit a higher level of job satisfaction. Consequently, their performance will be improved.

This study significantly contributes to the existing literature on intrinsic reward and job performance by investigating the unexplored side of intrinsic reward—the performance of the employee in different ways. First, the previous study showed that a reward management system can significantly influence a workforce and can be motivated to improve their efforts and performance (Rai et al., 2018 ), and therefore, different rewards have been employed to measure performance such as monetary reward (Aguinis et al., 2013 ), remuneration (Calvin, 2017 ), and enough pay and bonus (Pouliakas, 2010 ); hence, we indicated intrinsic reward for measuring employee performance. Second, only a few studies discovered the relationship between intrinsic reward and employee performance and used some mediators such as organizational commitment (Taba, 2018 ) and reward system (Riasat et al., 2016 ), but no study has employed employee motivation as mediators. Third, very limited research has been performed to examine intrinsic reward—the performance of the employee in the Pakistan context by using mediating mechanisms, but no study has explored that in SMEs. Therefore, this is the first study to examine the effects of intrinsic reward on the performance of the employee through employee motivation in Pakistani SME sector.

This study was conducted to analyze the impact of intrinsic rewards on the performance of the employee with the mediating mechanism of employee motivation in the SME sector of Rawalpindi and Islamabad, Pakistan. The major results of the study disclose that intrinsic rewards have a significant positive impact on the motivation of the employee and employee performance. Another important result is that the motivation of the employee plays a positive and significant mediating role in the association of intrinsic rewards and performance of the employee. It is a general perception that when employees are motivated, they perform better. It means that if organizations have a good reward management system, the motivation of their employees will be high and the performance of their employees will amplify with greater magnitude. In the absence of a good reward management system, their employees will be demotivated, and the performance of their employees will also be declined. The SME sector should develop a sound rewards management system for employees to boost their morale and motivation to get better results. The study is particularly helpful for this sector in understanding the importance of intrinsic rewards and motivation. It is also useful to understand the problems which organizations may face if they do not have a good reward management system.

Theoretical and Practical Implications

The findings of this study hold important implications both theoretically and practically. The outcomes of this research propose some essential theoretical implications for reward management system literature. First, by testing the mediating role of employee motivation in the relationship between intrinsic reward and employee performance, this study contributes to a superior understanding of the causal mechanism through which intrinsic reward relates to the job performance of the employees. The outcomes of the recent study identify that organizations improve employee motivation by exhibiting intrinsic rewards, which ultimately lead to enhance employee performance. The findings of this study support the current evidence indicating that employee motivation is a significant motivational source that encourages workers to be extra dedicated and satisfied with their job (Grant, 2008 ; Sledge et al., 2008 ). Besides, analyzing the motivation of employees as a mediator helps us better understand how and why intrinsic incentives can improve the behavior of employees at work. Second, this study has been conducted in a developing nation “Pakistan,” which is an Asian country, and has a rare study in this area. To date, very few studies have explored the reward management system and its effect on employee performance in the Pakistani SME sector. Interestingly, the study outcomes indicate that intrinsic rewards can be beneficial and effective in enterprises and organizations in the country.

The practical implication of this study is that first, our study confirmed that intrinsic reward is effective in improving employee performance and also suggests that the reward system is very important in the organizations to encourage their employees. Second, as this study illustrates that intrinsic reward has an indirect effect on employee performance in the presence of employee motivation, it is suggested that organizations should inaugurate such conditions through which they can improve the performance of the employees. Organizations should do whatever they can to increase the motivation of the employees. Third, as the intrinsic reward has a positive influence on job performance, firms need to promote a reward management system and motivation. For instance, organizations can promote a reward management system (financial reward and non-financial reward), and this would motivate employees to achieve their goals and promote optimal fulfillment in work.

Another possible way to encouraging employees is to set goals and achieving them provides an intrinsic reward (intangible award, i.e., appreciation, promotion, and authority). A firm should require all workers to set targets for personal development at work, education, and the completion of projects. Provide training to workers on how to fixed measurable objectives and encourage them to set a variety of short- and long-term goals. Give employees input into company goals as well to make them feel like they are working toward a greater cause. As employees meet goals and set new goals, they will receive intrinsic rewards and increase their motivation.

Study Limitations and Future Directions

It is very essential to view some limitations of this study which can lead to future research. First, the cross-sectional study design was applied for data collection; future studies should use a longitudinal study design to this study model to avoid the ambiguity of a causal relationship. We have studied the relevant source of intrinsic reward and employee motivation in the domain of work, and we used a measure of intrinsic reward that exclusively focuses on intangible incentives. As there are several other sources of tangible reward and extrinsic motivation in most work settings, including handsome salary, bonuses, deadlines, evaluations, and surveillance, future work could develop new and broader measures. For future research, other factors of employee performance like employee efficiency, job achievement, and job fulfillment should be considered while seeing the impact of rewards. It is also recommended for future researchers to check the effects of intrinsic and extrinsic rewards on the performance of the employee in other sectors like education, health, etc. By taking a larger sample of the employees, their comprehensive performance may be judged in other developing countries. Besides, this study was performed in the context of one developing nation, Pakistan. Future studies should be carried out to boost the generalizability of the findings by testing this model in other developing countries. Moreover, it would be interesting in the future to explore the moderating role of motivation of the employee between the reward management system and job performance.

Data Availability Statement

Ethics statement.

The studies involving human participants were reviewed and approved by the research Ethical Committee of Zhejiang University, Hangzhou, China. The participants provided their written informed consent to participate in this study.

Author Contributions

FM initiated the basic idea and wrote the main part of the manuscript and built the article structure. LW reviewed and improved the manuscript. MA contributed to the methodology of this study. All authors contributed to the article and approved the submitted version.

Conflict of Interest

The authors declare that the research was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest.

Acknowledgments

FM would like to express special gratitude to my academic supervisor LW (Professor in School of Public Affairs, Zhejiang University China) for his guidance, constant support, funding, and orientation.

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IMPACT OF EMPLOYEE MOTIVATION ON ORGANIZATIONAL PERFORMANCE: A SCOPING REVIEW PAPER FOR PUBLIC SECTOR

• September 2021
• 8(3):984 – 996

• University of Western Macedonia

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A Literature Review on the Effects of Employee Relation on Improving Employee Performance

It is apparent that employees are the major valuable assets of an organization in which without them, hard to realize its basic objectives. To harvest more from employees it requires creating conducive working environment which satisfies the needs of individual employee as well as the manager of an organization. This conceptual paper tries to examine the basic concepts employee relation and its effects on employee performance through investigating a number of employee relationship management components such as communication, participative leadership, shared goals and value, mutual trust, motivation and conflict management. Moreover, the relationship between employee relations and employee performance is explored in-depth. The study also discusses on employee performance which comprises of the basic concept and measurements of performance. From a comprehensive review of literature on earlier studies, it was found that the preceding researches didn't make thorough endeavor to address the effects employee relation on employee performance. Finally, it was suggested that future researchers should investigate profoundly to come up with notable empirical results. Key words: Effects, Employee Relation, Improving, Employee Performance 1. INTRODUCTION

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Bolarinwa I B R A H I M Bolarinwa

Maintaining healthy employee relations in an organization is a pre-requisite for organizational success. Strong employee relations are required for high productivity. Employee relations deal with avoiding and resolving issues concerning individuals which might arise out of or influence the work scenario. This study aimed at assessing the impact of good employee relations on employee performance. This study used a descriptive survey method. Convenience sampling technique was used to select the sample size of one hundred and thirty-nine (139). The instrument used was a questionnaire.. The Kendall rank correlation was used as the inferential statistics. This study reveals that a good employee relation has influence on employee performance. The findings also revealed that strong employment relations create a pleasant atmosphere within the work environment, motivation and company rules. It is concluded that employees have been seen as an organization's valuable assets. The nature and amount of work performed by them have a direct impact on the productivity of an organization. It is therefore recommended that a concern for equity and justice should characterize the relationship between management and employee, and this will require the communication of sufficient information about changes and developments. Also, fair policies and practices exhibited by the management of the organisation to create equal opportunities and provide equal treatment to employees with no bias which promotes a positive attitude towards organization and work among employees.

Entrepreneurship and Innovation Management Journal ISSN: 2310-0079

HAL (Le Centre pour la Communication Scientifique Directe)

EL KHAZZAR Aziz

Procedia - Social and Behavioral Sciences

Ömür Hakan Kuzu

Roopali Bajaj & Shalini Sinha

TJPRC Publication

Some HRM determinants, which if improved can build good employee relations in an organization and thus status of Employee Relationship can be improved in the organization. By quantifying HRM determinants and equating it to satisfaction of employees, the study has discovered and established that status of ERM in the state PSUs is not very good and measures of HR practices are not being implemented as they should be.

Budapest International Research and Critics Institute (BIRCI-Journal) : Humanities and Social Sciences

Tati Hartati

The background of this research was the low performance of the employee, which could be seen from the non optimal task implementation, overdue task completion, and low discipline. In this study, the researcher used analytical descriptive method, also literature study and field study as the instruments. The field study consisted of observation, interview, and questionnaire. The result of the research showed that the human relations done by the Sub-District Head had not been fully implemented based on the principles in human relations. It caused the low employee performance in the Argapura Sub-District Office of Majalengka Regency, so that the hypothesis of the researcher is true and can be accepted.

International Journal of Research and Analytical Reviews 2348-1269

Parveen Kumar , Ulka Tewari

Every individual shares a multifaceted relationship with colleagues at the workplace. As it is known to all that human beings are not machines who can start working within seconds or at a push button. They need someone to talk, to discuss ideas and to share their happiness and other emotions. We cannot expect an individual to start working like a robot with complete involvement in the work without knowing with whom he is working. A man is not indifferent; he needs people around. Without people working around the workplace turns hostile. An isolated environment demotivates an individual and spreads negativity which ultimately hampers performance. It will not be wrong to submit that workplaces are like homes; the more we are comfortable with each other, the more prosperity we gain. To achieve a common goal, mutual respect and a sense of safety are must at the workplace. It is an established notion that to work with people having different educational and cultural backgrounds is not that difficult rather than to work with people having different mindsets. It is much essential that employees share a healthy and happy relationship with each other at the workplace. Mutual understanding and mutual respect are the two hallmarks of meaningful Communication.A healthy bonding between the employer and the employee also strengthen productivity. When effective communication practices are in place at the workplace then employees feel more connected and committed to the organization. The Communication Breakdown at the workplace creates problems. This paper attempts to highlight the importance of Strong Employee Relations at Workplace and the Impact of these relations on the organisational success.

Vinayak webworld

JOURNAL OF MECHANICS OF CONTINUA AND MATHEMATICAL SCIENCES

kalpana koneru

Acharya Institute of Technology.

Mahak balani

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Please note you do not have access to teaching notes, impact of employee benefits on work motivation and productivity.

International Journal of Career Management

ISSN : 0955-6214

Article publication date: 1 December 1995

Everyone works in expectation of some rewards, and welfare is one of them. In order to understand the impact of employee benefits on employees′ work‐motivation and productivity, questionnaires were sent to corporations which had undertaken employee benefit programmes. Some of the significant results of this study are: employee benefit programmes have greater impact on work‐motivation than on productivity; monetary benefit programmes are most highly valued by both executives and workers; there is a cognitive gap between management and worker on the importance of employee benefit programmes; different genders have different benefit demands; unmarried employees, more than married employees, perceive that employee benefits have a greater impact on job performance. Employees with different education levels and positions perceive different employee benefit impacts; and employee benefit programmes have greater influence on younger employees′ job performance.

• Productivity

Hong, J. , Yang, S. , Wang, L. , Chiou, E. , Su, F. and Huang, s. (1995), "Impact of employee benefits on work motivation and productivity", International Journal of Career Management , Vol. 7 No. 6, pp. 10-14. https://doi.org/10.1108/09556219510098064

Copyright © 1995, MCB UP Limited

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