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An evaluation
An evaluation of employee of employee
motivation in the extended public motivation
sector in Greece
63
Dimitris Manolopoulos
Department of Management Science and Technology, Received 14 November 2006
Athens University of Economics and Business (AUEB), Athens, Greece and Revised 26 March 2007
Management Department, Deree College, American College of Greece (ACG), Accepted 18 April 2007
Aghia Paraskevi, Greece

Abstract
Purpose The purpose of this paper is to advance the understanding of the relationship between
work motivation and organisational performance in the extended public sector, by testing empirically
common elements of existing theoretical frameworks.
Design/methodology/approach A unique questionnaire-based survey was carried out in three
organisations/corporations where the state is the major stakeholder. Of the 1,000 questionnaires
distributed, 454 were returned and included in the analysis. By using descriptive statistics the
provision of extrinsic rewards and intrinsic motives in the extended public sector of Greece was
identified.
Findings Findings show that the public sector in Greece is more likely to provide extrinsic than
intrinsic rewards, however the latter seems to be related to better organisational outcomes. Both
individuals ability and demographic characteristics are core determinants of employees motivational
preferences.
Research limitations/implications The core of this paper tests empirically the relationship
between intrinsic and extrinsic motivation with performance in a country of EU periphery. Caution
should be exercised in generalizing the results for more advanced economies.
Practical implications Organisational leaders and public management in Greece need to conceive
work motivation as a complex system and recognize the importance of intrinsic incentives.
Originality/value There is currently limited evidence on the impact of motivation in the
performance of the extended public sector. This research is one of the very few that has been made
from the perspective of employees. To the extent of the authors knowledge, this is the first time that a
detailed public sector level analysis on work motivation has been presented for Greece.
Keywords Public sector organizations, Motivation (psychology), Organizational performance, Greece
Paper type Research paper

Introduction
Since the eighties there has been a concerted effort to reform the European public
sector. This has resulted in the deregulation of major markets related to public utilities,
such as energy and telecommunications; private financing has been encouraged for
public investment projects and substantial market elements have been introduced to
the institutional context that regulate public organisations operations (Burgess and Employee Relations
Vol. 30 No. 1, 2008
Ratto, 2003). Under the above developments, the management of the public sector has pp. 63-85
come to the fore as organisations traditionally involved in the administration of state q Emerald Group Publishing Limited
0142-5455
matters are asked to change their approach, be more business oriented, show economic DOI 10.1108/01425450810835428
ER results and be assessed against performance criteria (Bourantas and Papalexandris,
30,1 1999). In order to respond to the above and similar demands, the public sector is
wrestling with how best to transform itself; seeking constantly to optimise its
potentials in the face of the new challenges it confronts. In this era of transformation,
the concern over employees motivation is on the top of public management research
agenda (Behn, 1995). Indeed, management literature (e.g. Judge and Ilies, 2002; Rainey,
64 1997; Pfeffer, 1994) asserts that people are the most important organisational resource
and the key to achieving higher performance, while Perry and Wise (1990) argue that
public administration needs to reframe the motivation question. Thus, it seems that in
the dawn of a new century, the central challenge for public managers is to meet
corporations/organisations objectives for effectiveness and productivity while
fulfilling the needs of employees for motivation, reward and satisfaction.
Despite the importance of the topic, the vast majority of research on work
motivation tended and continues to concentrate too heavily on the private sector (Dixit,
2002; Perry and Porter, 1982). Moreover, much of the literature that relates to public
sector motivation is theoretical (see Lewin, 2003; Wright, 2001; Rainey, 1994 for
excellent literature reviews). The limited evidence provided on related issues consists
largely of empirical public-private sector contrasts (e.g. Frank and Lewis, 2004;
Jurkiewicz et al., 1998; Maidani, 1991; Rainey, 1982). With few notable exceptions (e.g.
Alonso and Lewis, 2001; Brewer and Selden, 2000; Selden and Brewer, 2000), empirical
research on how public employees are motivated and the impact of different types of
motivation on public organisations performance has received relatively little attention.
In addition, as best as we can tell, with the exception of Brewer and Selden (2000) all the
studies that have related public sector performance with motivation have been made
from the perspective of managers and not employees. The purpose of this paper is to
provide insights upon the above-identified gaps of the literature with the overall
objective to assist public administration in the development of an effective motivation
scheme aligned with organisations structure and objectives.
The focal country of our analysis is Greece. We selected Greece as the country to
investigate because reforms in the public sector are a priority for governments and
during the last years we have witnessed a successfully transition of state-owned
organisations operated by central-planning fixtures towards market-economy
principles. The Hellenic public sector can be divided into two major parts: firstly,
the core public sector (ministries, army, police etc.) and secondly, the extended public
sector, which consist of legal entities (organisations and corporations) where the state
is the major or absolute shareholder. The paper is focused on the latter sub segment
and survey the relationship between the motivations offered to employees and
performance in three state-owned organisations under the current privatisation era.
We approach this topic with three central questions: First, to what extent public
organisations provide their employees with extrinsic and intrinsic incentives to work
in their interests? Second, which type of motivation has a positive impact on
organisations performance? Third, which are employees perceptions concerning the
motivators that public managers should use in order to advance performance? To the
extent of our knowledge, this is the first time that such a detailed analysis is presented
in the literature for Greece per se.
The paper proceeds as follows: the next section briefly relates strands of the
literature relevant for the current survey and identifies the motivators we used in our
survey. Following that we present our sample characteristics and evaluate the extent to An evaluation
which extrinsic and intrinsic motives are provided in three organisations where the of employee
state is a major stakeholder. Next, we present the methodology we used in order to
investigate the impact of extrinsic and intrinsic motivation on performance and discuss motivation
the findings. This is followed by employees perceptions concerning the motivators
that public managers should focus upon, so as to improve organisations outcome and
foster a more productive workforce. In the last section we conclude by placing our 65
findings in a wider strategic and managerial context.

Literature review and theoretical development


Work motivation is one of the most intensively studied topics in the social sciences.
According to Selden and Brewer (2000), scholars have devoted substantial effort to
developing a master theory of motivation, trying to incorporate various characteristics
to the concept. In the main, in the fields of human resource management and
organisational behaviour, motivation is often described as being intrinsic or
extrinsic in nature (Sansone and Harackiewicz, 2000). Extrinsic motivation occurs
. . . when employees are able to satisfy their needs indirectly, most importantly through
monetary compensation (Osterloh et al., 2002, p. 64). In contrast, intrinsic motivation
is apparent when individuals behaviour is oriented towards the satisfaction of innate
psychological needs rather than to obtain material rewards (Ryan and Deci, 2000). In
other words, motivation is intrinsic when people . . . perform an activity for itself
(Van Yperen and Hagedoorn, 2003, p. 340); trying to experience the satisfaction
inherent in the activity or to secure . . . the obligations of personal and social norms
for their own sake (March, 1999: 377). Intrinsic motivation appears to be self-defined
(Loewenstein, 1999) and self-sustained (Calder and Staw, 1975) and is fostered by
commitment to the work itself, which must be both satisfying and fulfilling for the
employees (Deci, 1975). In any type of organisation (public or private), employees can
be motivated by both extrinsic and intrinsic factors that will fulfil their perceptions
regarding success, reward and satisfaction.
Researchers usually portray work motivation as a unifying topic that links together
a network of subordinate concepts. Indeed, the relationship and inter-connectiveness of
performance, goals, job satisfaction and work motivation is well established in
organisational literature (e.g. Igalens and Roussel, 1999; Lawler, 1994; 1981). In the
private sector, literature indicates that corporations usually link employees
satisfaction with the provision of financial (salary and high-powered incentives)
rewards. Gomez-Mejia and Welbourne (1988, p. 174) argued that pay choices available
to management have a positive impact on firms performance and the effective use of
human resources, whereas Spilerman (1986) saw a positive relationship between the
opportunity for hierarchical advancement and increased financial income. Apart from
economic rewards, evidence also considers a positive association between employees
satisfaction and other extrinsic incentives as well. Thus, Smith et al. (1984) stressed the
need to create a working environment that reinforces rewards and recognition. In
addition, there is also evidence to support the straightforward positive relationship
between intrinsic motivation and operational effectiveness. Amabiles (1998)
conceptual paper had established a positive correlation between intrinsic rewards
(inner satisfaction and challenging work) and performance, whereas Manolopoulos
ER (2006), focused on creativity, arguing that the major reward for employees could be the
30,1 work itself.
In relation to the private-public motivational differences, the empirical research
confirmed similarities between employees concerning the fulfilment of their
achievement and self-actualisation needs (Posner and Schmidt, 1996). The need for
job security has also been found to be similar in the two sectors (Gabris and Simo,
66 1995), while Rainey (1982) concluded that public sector managers cared less about
monetary rewards compared to private sector managers. On the contrary, the
opportunity to serve society and the public interest matter more to public than private
employees (Crewson, 1997; Rainey, 1982). Turning more specifically to the relationship
between public sector performance and motivation, the empirical investigation on the
topic is limited, mainly due to the difficulties associated with the measurement of
public sector outcomes (Stein, 1986). The seminal studies of Crewson (1997) and Brewer
and Selden (1998) have documented the positive correlation of the two concepts and
initialized several surveys thereafter. Following research that attempted to survey the
impact of motivation on performance considered only a few factors that affect
organisational outcomes (Brewer and Selden, 2000) and was mainly centred on the
provision of extrinsic incentives. Thus, Paarsch and Shearer (2000) indicated a positive
association among work outcomes, public employees motivation and
performance-related pay designs, whereas Wright (2007) implied the positive
relationship between the availability of extrinsic rewards and organisational
performance. Concerning the intrinsic type of motivation, Rainey and Steinbauer
(1999) suggested that the effectiveness and performance of public agencies may be
enhanced by three interrelated levels of rewards, namely task, mission and public
service, Wright (2007) emphasized on public ethos, while Frank and Lewis (2004) have
stressed the importance of public employees in such work characteristics as
meaningful service and job security.
Overall, despite some conflicting empirical findings on work motivation, the mass of
existing research has broadened our understanding on how to conceptualise the topic.
The evidence revised here indicates that traditional work motivation models have often
been based upon the evaluation and ranking of specific job attributes; derived mainly
through the provision of extrinsic and intrinsic incentives (the same argument is well
established in the works of Kovach, 1995 and Silverthorne, 1992). In this survey, twelve
possible motivators are investigated. The motivators were mainly identified in the
classical study conducted by Herzberg (1968), which was revalidated in 2003 (Harvard
Business Review) and the work of Jurgensen (1978). Herzberg identified: firstly,
intrinsic factors in employee motivation, such as achievement, recognition for
achievement, the work itself, responsibility, growth and advancement; and secondly,
extrinsic factors, such as company policy and appreciation, supervision, interpersonal
relationships, working conditions, status, payment and security. Thus, the motivators
we used in our research were: (x1) provision of fair wage, (x2) provision of pay
incentives, (x3) communication and cooperation in the working environment, (x4)
opportunity for hierarchical advancement, (x5) security in the workplace, (x6) working
conditions, (x7) opportunities to advance the field of employees expertise, (x8) need for
creative work, (x9) need for esteem and reputation, (x10) recognition for work, (x11) need
for competence, (x12) opportunity to take responsibilities. The motivators we used in
our survey are defined and operationalized in Table I.
An evaluation
Variables Motivation instruments Survey question 4 1
of employee
X1 Provision of fair wage In relation to the effort I Strongly Strongly motivation
devote to my work, my agree disagree
position, my prior working
experience and educational
background, the relevant 67
wages in the private sector
and the economic situation of
the country, I consider to have
a fair wage
X2 Provision of pay incentives Our organisation has Extensively Not at all
introduced performance
related pay schemes
X3 Communication and The management makes any Strongly Strongly
cooperation in the working possible effort to create a agree disagree
environment collaborative work
environment, to build
relationships of trust and
mutual understanding among
employees, to rely on open
and honest communication
and to share knowledge and
information in all directions
X4 Opportunity for The organisation has set clear Strongly Strongly
hierarchical advancement criteria for promotions, based agree disagree
on meritocracy and
transparent procedures
X5 Security in the workplace The norm in our organisation This is This is based
is that employment is enshrined on standard
protected in law practice
X6 Working conditions The management cares about Strongly Strongly
the health and safety of agree disagree
employees. It provides
adequate and up to date IT
support and infrastructure. It
respects the individual
characteristics of employees
personality and encourages
their development
X7 Opportunities to advance Your employment requires It happens It seldom
the field of employees different specialized skills and very often happens
expertise you obtain ongoing feedback
indicating success in their
accomplishment
X8 Need for creative work My job is creative and Strongly Strongly
produces something agree disagree
meaningful
X9 Need for esteem and Your employment provides Strongly Strongly
reputation you the opportunity to make agree disagree Table I.
a difference to society Operationalization of
(continued) motivation instruments
ER
Variables Motivation instruments Survey question 4 1
30,1
X10 Recognition for work Work evaluation is based on Strongly Strongly
explicit performance criteria. agree disagree
Performance evaluation forms
include the roles and
68 responsibilities of employees,
the extent of achievement to
pre-determined targets and
the quality of final
deliverables. Evaluations are
fair and constructive. Good
evaluation has a positive
impact on career advancement
and/or pay raise of employees
X11 Need for competence The organisation encourages Very often Almost never
the participation of employees
in seminars, workshops and
conferences
X12 Opportunity to take The organisation provides To an To a restricted
responsibilities employees the freedom in extended degree
deciding how to carry out degree
their work and encourages
Table I. them to take initiatives

Sample characteristics and extent of extrinsic and intrinsic motivation


The sample consisted of three large state-owned corporations located in Greece,
namely Public Power Corporation (PPC), Athens Water Supply and Sewerage
Company (Eydap) and Hellenic Aerospace Industry (HAI)(1). Since these firms operate
in diverse industries, they vary by size, year of entrance and so on; it seems that there is
no reason to expect any systematic bias in the forthcoming empirical analysis. The
current research is based on a unique questionnaire-based survey that took place in the
beginning of 2005. We met with the HR managers of these corporations and
analytically explained the scope and methodology of the survey, asking them to
distribute the questionnaires to their personnel. Each meeting lasted approximately
one and a half hours and we guaranteed full confidentiality of the participants
identities. The managers have reassured us that the responses would be as
representative as possible, selecting employees with different educational background,
age, gender, operational department, position in the hierarchy and so forth. In total,
1,000 questionnaires were distributed and 454 useable-answered questionnaires were
collected(2), providing a response rate of approximately 46 per cent. The majority of
respondents identified themselves as male (62 per cent) and well educated
(approximately 70 per cent of respondents have at least a bachelor degree). Most of
them (67 per cent) are married. Sample characteristics are presented in Table II.
Respondents were asked to evaluate the provision of twelve motivators (see Table I for
the operationalization of motivation instruments). A four-point Likert-type scale was
prepared, where the scale value 4 indicates a strong prevalence of the motivator and
scale value 1 a weak presence. The reliability coefficient a is 0.71 for extrinsic and
Age of employee Educational background
Number of questionnaires Number of Response Gender Over Under PhD or Non Marital status
Company distributed replies rate (%) Male Female 45 36-45 36 Master Bachelor degree Married Single

PPC 400 207 51.75 134 73 36 101 70 39 100 68 147 60


EYDAP 400 182 45.50 102 80 41 82 59 28 91 63 111 71
HAI 200 65 32.50 44 21 20 28 17 24 35 6 47 18
Total 1,000 454 45.40 280 174 97 211 146 91 226 137 305 149
An evaluation
of employee

Sample characteristics
motivation

(data)
69

Table II.
ER 0.74 for intrinsic motivators respectively. Thus, the reliability coefficients were above
30,1 0.55, which is considered the cut off point of basic research (Tharenou, 1993) and
higher to 0.70 which is the suggested reliability level proposed by Nunnally (1978).
Results are reported in Table III.
In the main, the evidence provided reveals the dominance of extrinsic rewards as a
way to empower and motivate employees, indicating that in the extended public sector
70 of Greece intrinsic motivation is clearly less utilized (average responses of 2.82 and 2.42
respectively, t 5:61, significant at the 0.0001 level). Findings lend support to
previous studies (e.g. Sherman and Smith, 1984) that have shown that when the
structure of an organisation is characterized by high levels of centralization,
formalization and standardization (which are considered to be the structural
characteristics of public organisations) the result is a decreased use of intrinsic
motivation. Perceptions of fair pay (AR of 2.89) and increased job security (AR of 3.71)
are the major concerns related to extrinsic satisfaction that public management places
more attention on, confirming views that the above constructs remain dominant
fixtures in public organisations. The introduction of pay incentives are third in ranking
(AR of 2.63), underlying the rationale to instil market-based values in the public sector

Extrinsic motivators Intrinsic motivators


Motivators X1 X2 X3 X4 X5 X6 X7 X8 X9 X10 X11 X12

Independent variables
Organisation
PPC 2.75 2.84 2.65 2.60 3.75 2.55 2.25 2.35 2.40 2.20 2.33 2.15
EYDAP 2.91 2.22 2.44 2.55 3.72 2.40 2.14 2.25 2.62 2.44 2.41 2.61
HAI 3.27 3.12 2.88 2.85 3.60 2.71 3.05 3.04 2.85 2.85 3.12 2.75
Average total 2.89 2.63 2.59 2.62 3.71 2.51 2.32 2.40 2.55 2.38 2.44 2.42
Gender
Male 2.81 2.60 2.51 2.91 3.69 2.66 2.35 2.52 2.48 2.45 2.62 2.45
Female 3.01 2.67 2.71 2.15 3.74 2.26 2.27 2.20 2.66 2.26 2.15 2.37
Average total 2.89 2.63 2.59 2.62 3.71 2.51 2.32 2.40 2.55 2.38 2.44 2.42
Marital status
Married 2.83 2.71 2.65 2.68 3.70 2.58 2.35 2.37 2.49 2.41 2.36 2.51
Single 3.01 2.46 2.46 2.49 3.73 2.36 2.25 2.46 2.67 2.31 2.60 2.23
Average total 2.89 2.63 2.59 2.62 3.71 2.51 2.32 2.40 2.55 2.38 2.44 2.42
Age of employee
Under 36 2.62 2.59 2.57 2.65 3.59 2.37 2.22 2.42 2.41 2.35 2.45 2.31
Between 35-45 2.94 2.64 2.61 2.61 3.77 2.48 2.37 2.47 2.49 2.39 2.39 2.48
Over 45 3.25 2.66 2.57 2.59 3.76 2.78 2.36 2.21 2.89 2.40 2.53 2.45
Average total 2.89 2.63 2.59 2.62 3.71 2.51 2.32 2.40 2.55 2.38 2.44 2.42
Educational background
PhD or Master 2.74 2.44 2.66 2.81 3.60 2.84 2.11 2.52 2.31 2.40 2.25 2.68
Otherwise 2.92 2.68 2.56 2.56 3.74 2.41 2.38 2.36 2.61 2.37 2.49 2.34
Average total 2.89 2.63 2.59 2.62 3.71 2.51 2.32 2.40 2.55 2.38 2.44 2.42
Notes: Motivators X1: Provision of fair wage; X2: Provision of pay incentives; X3: Communication
Table III. and cooperation in the working environment; X4: Opportunity for hierarchical advancement; X5:
Evaluation of extrinsic Security in the workplace; X6: Working conditions; X7: Opportunities to advance the field of
and intrinsic motivators employees expertise; X8: Need for creative work; X9: Need for esteem and reputation; X10: Recognition
(average responses, for work; X11: Need for competence; X12: Opportunities to take responsibilities
n 454) Source: Authors survey
in order to improve efficiency and effectiveness. There is ample evidence in the An evaluation
literature (e.g. Messmer and Taylor, 2001; Lazear, 2000) to argue that the provision of of employee
economic rewards comprises a major motivator. In fact, according to Lawler (1994),
pay has certain optimal characteristics: it is valued by its recipient, the size of reward motivation
can be flexible and its value remains relatively constant. Moreover, Weaver (1988)
argued that in cases where jobs can not offer intrinsic job satisfaction (in our survey
the fulfilment of the need for creative work captured an AR of only 2.40); direct cash 71
rewards comprise the only motivator for advancing productivity. The importance of
job security to public employees has also been stressed by Wright (2001). However, the
results of the survey indicate that public management in Greece does not provide
adequate levels of intrinsic satisfaction to employees; even though numerous studies
support that the public sector attracts employees who seek intrinsic motivation (e.g.
Wright, 2007; Maidani, 1991). Thus, public management tends to lessen the
comparative importance of intrinsic incentives, such as recognition for work (AR of
2.38) and the provision of opportunities for scientific advancement (AR of 2.32). No
significant differences in the responses concerning the age, marital status and
educational background of the respondents were observed in the majority of
motivation items. However, two points require further attention here that should be
carefully scrutinized by public administrators: First, there seems to exist differential
opportunities for promotion between men and women and, second, it is evident that in
more technologically advanced sectors (aerospace) intrinsic motivation is clearly more
pronounced.
Table IV presents the mean values of the overall provision of extrinsic and intrinsic
motivation. Looking at the statistical significance of the mean differences in the level of
extrinsic and intrinsic rewards provided to public employees, three findings are of
specific interest. First, male respondents conceive that managers provide them with
more clear incentives (both extrinsic and intrinsic) in order to enhance their
productivity (both mean values are larger compared to female respondents, significant
at the 0.001 level). Second, public managers provide more educated employees with a
wider range of intrinsic rewards (t 3:02, p , 0:05). Finally, analysis of variance
suggests that public motivation schemes vary across sectors. Thus, the management of
organisations located in the sector where technology could comprise an imperative for
sustained competitiveness relies on higher levels of both intrinsic and extrinsic
rewards (F 27:99 and 4.00 at 0.0001 and 0.01 respectively) in order to enhance
productivity and achieve higher performance levels.

Methodology
For modelling the impact of each motivation item to the performance measure a neural
network (NN) has been constructed. The technology of NN is well cited within social
sciences (Garson, 1998) and can be applied to efficiently process large amounts of data
provided by an attitudinal survey and to extract the implicit patterns and previously
unknown correlation rules underlying the data. DeTienne et al. (2003) explained two
major strengths of using NN in organisational research. First, technically, these models
are unconstrained by the typical assumptions of regression analysis. They do not
require assumptions about population distribution, which makes them less prone to the
hindrance of dimensionality. Moreover, they do not assume that independent variables
are not correlated, thus they solve the multicollinearity problem found in multiple
72
ER
30,1

motivation
Table IV.
Mean differences of
extrinsic and intrinsic
Intrinsic Extrinsic
a
n Mean t-value SD p-value n Mean t-value SD p-value
Gender
Male 280 2.48 6.78 * * * 0.287 ,0.001 280 2.86 4.52 * * * 0.367 , 0.001
Female 174 2.32 174 2.77
Marital status
Married 305 2.41 4.94 * * * 0.352 ,0.001 305 2.86 2.21 0.614 * * , 0.05
Single 149 2.42 149 2.75
Educational background
University graduates 317 2.46 3.02 * * 0.412 ,0.05 317 2.79 1.67 0.729 n/sc
Otherwise 137 2.33 137 2.88

n Mean SE b Anova test (F-value) p-value n Mean SE Anova test (F-value) p-value
Organisation
PPC 207 2.28 0.04 27.99 * * * ,.0001 207 2.86 0.11 4.00 * , 0.01
Eydap 182 2.41 0.03 182 2.71 0.21
HAI 65 2.94 0.06 65 3.07 0.17
Age
Under 36 146 2.36 0.71 0.72 n/s 146 2.73 0.95 1.42 n/s
Between 36-45 211 2.43 0.92 211 2.84 0.82
Over 45 97 2.47 0.53 97 2.93 0.48
Notes: *Significant at 0.10; * *significant at 0.05; * * *significant at 0.01; tests are performed with Stata 7.0; avalue of the standard deviation; bvalue of the
standard error; cnot significant
linear regressions. Additionally, they do not conceive that independent variables are An evaluation
necessarily independent of each other and they do not assume the normal distribution of employee
of residuals with constant variance and zero mean, as multiple linear regressions.
Second, conceptually, NN are considerably more robust that conventional methods of motivation
analysis because of the backpropagation algorithm that train the network to learn the
correlation between the dependent variables (motivators) and their effect on the output
(organisational performance). Finally, in our research we seek to find specific patents 73
that lead to performance improvements. Gorr et al. (1994), support that NN can
represent complex patterns more effectively than multiple linear regressions; while
Castillo et al. (2002) argue that the principal strength of NN lies in pattern recognition
and optimisation problems. Alternatively, we also performed factor analysis and
discrete choice multivariate regressions, but they provided us with inferior results (the
goodness-of-fit index was 0.88 which is slightly lower than the recommended value of
0.90).
Our network consisted of three layers of units. The first layer, which is the input
layer, consists of 12 units, each one representing the motivation instruments xj (where
j 1; 2; . . . ; 12). In our research, input items (motivators) were properly pre-processed
in order to get the most possible accurate results. Uniform noise was added to the
input, which is shown to increase the generalization capabilities of the final network.
The other layer, which is called hidden, consisted of two units, representing the two
types of motivation (extrinsic and intrinsic). Each unit of the hidden layer is connected
to all 12 input units. Each connection of a hidden unit i to an input unit j is
characterized by a numerical value wij, called weight. The value of the weight is an
indicator for the importance of a connection. A large weight (positive or negative)
between the hidden and an input unit indicates that the hidden unit largely depends on
the item that corresponds to that input unit. A small weight (compared to the rest of the
weights), on the other side, indicates that the hidden unit is not strongly influenced by
that input variable. The layer of hidden units is connected to another layer of units
called output layer, which provides the final results of the estimation. In our case the
output layer consists of one unit representing the average performance of the
organisations under examination (calculated as the average difference in the volume of
sales between 2001-2002, 2002-2003 and 2003-2004). Performance is connected to all
hidden units the same way hidden units are connected to input units. The above
relationship is presented in Figure 1.

Figure 1.
The structure of the
neural network
ER The impact of intrinsic and extrinsic motivation on performance
30,1 For building a model that estimates the performance based on the values of the
motivation items, the neural network was trained by using a supervised training
algorithm. Each time, an input pattern was presented to the network and the network
estimated the corresponding performance. The training procedure was continued for
all the data samples observations repeatedly. Training ended when the summed
74 squared error between the actual and the estimated performance values for all
observations was below a pre-set small value (0.005). The algorithm used for the
adaptation of the network weights is the backpropagation algorithm. The weights
from the input units to the hidden units are presented at Table V.
The most important variable, which affects the 1st hidden unit with its presence, is
the provision of pay incentives (x2). The 1st hidden node is also strongly affected by
increased security in the workplace (x5) and partially affected by communication and
cooperation in the working environment (x3) and limited opportunities offered to
employees to take responsibilities (x12). Following our literature review and theoretical
development section, results from Table IV indicate that the 1st hidden unit (h1)
represents the extrinsic type of motivation. The 2nd hidden unit is also affected by the
motivator item x12 (though in this case in a positive way); namely the opportunity
offered to employees to take responsibilities. Opportunity for hierarchical
advancement (x4) is the second highest in importance variable. The other relevant
contributory weights ranked in order are the opportunities to advance the field of
employees expertise (x7) and the need for competence (x11). Accordingly, it seems
plausible to support that the 2nd hidden unit (h2) represents the intrinsic type of
motivation. The weights from the hidden units (h1 and h2) to the output unit ( y) are
presented in Table VI.
The neural network used here tied motivation with the performance of state-owned
organisations. The impact of hidden units (h1 and h2) on the output node indicates that
the provision of extrinsic incentives appears to be counterproductive in the extended
public sector; echoing points made by researchers (e.g. Kohn, 1993; Lee and Lawrence,
1985) who argue that the provision of extrinsic motivation may only temporarily
benefit an organisation, whereas in the longer term it is going to have a negative effect.
On the contrary, our findings offer support to previous studies (e.g. Croxson et al. 2001;
Crewson, 1997), confirming the positive impact of intrinsic motivation to public sector
performance. More specifically, results from our analysis provide additional evidence
to the claim that public employees job satisfaction is directly related to the fulfilment
of their innate needs, and when this happen the result is improved efficiency and
performance (Wittmer, 1991).

Employees perceptions for the importance of intrinsic and extrinsic


motivation on performance
Schneider (1983) argues that in order to introduce effective systems of public
governance we must understand the motivational patterns of people that work in an
organisation. Thus, to gain some further insights on how public employees conceive
the perceived relationship between motivation and organisational performance,
respondents were asked to report which of the motivators used here will contribute the
most to a scheme that will maximize employees work outcomes (see the Appendix for
the exact research question). The importance (contribution) of motivators is measured
Weight to 1st Weight to 2nd
s/n Motivators hidden unit Motivators hidden unit

x1 Provision of fair wage w1,1 2.14 Provision of fair wage w2,1 21.39
x2 Provision of pay incentives w1,2 7.65 Provision of pay incentives w2,2 2.97
x3 Communication and cooperation in the w1,3 5.17 Communication and cooperation in the 22.22
working environment working environment w2,3
x4 Opportunity for hierarchical advancement w1,4 4.58 Opportunity for hierarchical advancement w2,4 7.84
x5 Security in the workplace w1,5 6.42 Security in the workplace w2,5 21.02
x6 Working conditions w1,6 21.21 Working conditions w2,6 21.84
x7 Opportunities to advance the field of 24.42 Opportunities to advance the field of 6.84
employees expertise w1,7 employees expertise w2,7
x8 Need for creative work w1,8 21.92 Need for creative work w2,8 1.11
x9 Need for esteem and reputation w1,9 23.05 Need for esteem and reputation w2,9 24.24
x10 Recognition for work w1,10 23.16 Recognition for work w2,10 1.19
x11 Need for competence w1,11 3.15 Need for competence w2,11 6.18
x12 Opportunity to take responsibilities w1,12 24.65 Opportunity to take responsibilities w2,12 10.78
Source: Authors survey
An evaluation
of employee
motivation

motivators to hidden
The weights of
Table V.

layer units
75
ER using a four-category Likert type scale anchored from an absolute priority to
30,1 almost unimportant. Therefore, our dependent variables (c) are based on an
attitudinal survey, which generates data in the form of ordinal responses ranging from
4 (the maximum contribution of the motivator) to 1 (the less). The core independent
variables consist of indicators that tap individual ability (education, experience and
position) and employees demographic characteristics (gender, age, marital status). A
76 dummy tested the influence of sector (aerospace as the omitted source). The results are
reported in Table VII whereas the variables are defined and operationalized in
Table VIII.
In order to assess the impact of our independent variables on the motivation construct
we used ordered probit (OP) analysis. OP was selected because in our case c corresponds
to a specific range; indicating that a larger value means more (or better). Therefore, in our
research we employ ordinal, qualitative polychotomous dependent variables. If the
qualitative dependent variables were only polychotomous, literature suggests that we
could use linear regression models. Since they are also ordinal, linear models should be
rejected because they would misspecify the data generating process in assuming that
there is no order in the different categories that c could take. Thus, linear models would
consider the difference between a 1 and a 2 as equivalent to the difference between a 2
and a 3 and a 3 and a 4. OP models, while taking into account the existence of a ranking,
they also assume that the size of the difference between any two adjacent ratings is not
known but does not matter to the carrying out of the analysis. Another advantage of OP
models emerges from the nature of the survey question. Since responses to our research
question depend partly on its wording, and because in linear regressions the responses
are modelled directly (Daykin and Moffatt, 2002), results cannot be invariant to the
wording of question. However, the distribution over population of the underlying
attitude (motivation) should be invariant to the wording of the question. Because OP
model estimates the parameters of the underlying distribution, rather than the response
itself, any such framing effects are likely to be avoided.
Due to space constraints we only refer to the regression results and not the average
responses and the correlation matrix(3). The likelihood ratio chi-square indicates that
ten out of twelve models are significant at the 10 per cent level. The pseudo-R-square is
also reported for every model in Table VII. Overall, the robustness of our results is quite
satisfactory, ascribing a considerable predictive explanatory power to our models(4).
Findings show that employees ability comprises a decisive set of factors that influence
the desired kind of motivation within public sector work environment. In our research,
the construct of ability includes tenure (position), prior working experience in the private
sector and educational background. Most of these variables are statistically significant
and provide insights into the mechanics of work motivation. Thus, variable pay
incentives appeared to be very significantly positively related with more educated and
employees that had prior working experience in the private sector, implying that reward
incentives may comprise the response of public management to deviate from a

Table VI.
Impact of hidden units Weight
(extrinsic and intrinsic
motivation) on output W1 2 144,052
node (performance) W2 187,364
X1 X2 X3 X4 X5 X6 X7 X8 X9 X10 X11 X12

AGE 1.087** 0.387 2 1.076 1.004 0.986** 20.550 0.188 2 0.963 0.914*** 20.417 0.441** 1.285***
(0.632) (0.305) (0.870) (925) (0.446) (0.486) (0.125) (855) (0.345) (0.400) (0.212) (0.348)
M/STAT 0.325* 0.587* 0.660 0.429 0.624* 0.717* 1.087 1.004 20.327 0.448** 2 0.321 2 0.325*
(0.172) (0.308) (0.541) (0.339) (0.398) (0.451) (0.976) (0.886) (0.280) (0.146) (0.295) (0.106)
GEN 20.553 2 0.588** 0.844* 2 0.456** 20.405*** 0.776 1.205 1.066 0.214 20.826 1.110 0.886**
(0.654) (0.298) (0.502) (0.187) (0.087) (0.502) (0.893) (907) (0.202) (0.705) (995) (0.482)
EDU 0.284 0.986*** 1.021 0.555 21.161 21.002 0.664 2 1.005 0.836** 1.451*** 1.107 0.317
(0.201) (0.225) (0.771) (0.503) (0.982) (0.963) (0.547) (0.954) (0.427) (0.416) (0.981) (0.201)
POSITION 20.551 2 0.539 2 0.287 0.661 20.789*** 0.109 20.371 0.254* 20.534 0.364* 2 0.712 2 0.476
(0.448) (0.507) (0.199) (0.488) (0.154) (0.086) (0.228) (0.098) (0.477) (0.122) (0.663) (0.388)
PWE 0.527* 0.724*** 1.142 2 1.130 2563 20.922 20.833** 2 0.254 20.228* 20.754 2 0.927 2 0.275
(0.256) (0.309) (0.950) (0.963) (432) (0.853) (0.412) (0.237) (0.092) (0.703) (0.886) (0.221)
ERG 20.764 1.054 2 1.006 2 1.112 21.116 20.457 0.144 0.884 0.333 20.702*** 0.554 2 1.064
(0.664) (0.874) (0.729) (0.856) (0.942) (0.432) (0.096) (631) (0.280) (0.250) (0.402) (0.834)
WS 20.583 2 0.663 0.290 2 0.741 1.002 21.061 20.965 2 0.481 0.106 0.661 2 0.519*** 0.926
(0.481) (0.549) (0.186) (0.562) (0.883) (0.922) (0.870) (0.404) (0.082) (0.590) (0.130) (0.844)
2
Pseudo R 0.21 0.38 0.05 0.06 0.23 0.11 0.17 0.05 0.20 0.27 0.15 0.24
LR chi2 35.44*** 46.70*** 10.18 14.32* 18.91*** 13.07* 25.12** 6.25 18.13** 28.76*** 24.12** 41.89***
Notes: *Significant at 0.10;**significant at 0.05; ***Significant at 0.01; figures in parentheses signify standard error; for description of motivators, see
Table III
An evaluation
of employee
motivation

motivators (n 454)
Regression results on
Table VII.
77
ER
As appear in
30,1 Variables regression Typea Operational definition

Demographic characteristics
Age of employee AGE L/D According to the age of employees three
categories were created: employees over 45
78 years old take the value of 3; employees between
36-45 take the value of 2; and employees under
36 years old take the value of 1
Marital status M/STAT B/D 1 married, 0 single
Gender GEN B/D 1 male, 0 female
Ability
Educational background EDU B/D 1 researcher holds a PhD or Master degree,
0 otherwise
Position POSITION L/D According to the position of the respondent, four
categories were created: respondents that serve
on the Board of Directors, are Directors or
Assistant Directors take the value of 4.
Respondents that are Heads or Assistant Heads
of Departments take the value of 3. Respondents
that are employees without a job title take the
value of 2 and administrative support takes the
value of 1
Prior working experience PWE B/D 1 Respondent had prior working experience
in the private sector in the private sector, 0 otherwise
Sector
Energy ERG B/D 1 Firm operating in the energy sector, 0
otherwise
Aerospace ASPACE B/D 1 Firm operating in the aerospace sector, 0
otherwise
Water supply WS B/D 1 Firm operating in the water supply sector,
Table VIII. 0 otherwise
Operationalization of
variables Notes: aBinary (B); /Likert Type (L); /Discrete (D)

predetermined and traditional compensation scheme and attract and retain more
competent professionals. This finding contradicts with previous studies (e.g. Perry and
Wise, 1990) that have argued that merit pay is conceived to be inappropriate in the public
sector. Overall, employees with prior working experience in the private sector seem to
promote the use of extrinsic rewards in order to advance performance. Apart from the
positive impact of the provision of individual incentive pay programs, the above
argument is even more reinforced by the statistical significant negative relationship
between those employees responses and the intrinsic motivators need for esteem,
reputation and the opportunity to advance the field of ones expertise. Perhaps this is
because those employees, having been employed in the market context, have developed
more job-related competencies and are used to work within performance-based pay
schemes. Our findings for more educated employees indicate that these individuals want
to be treated with respect and they want their contribution to be taken seriously.
Employees position seems also to affect the perceived relationship between motivation
and performance. Thus, members of the board, directors and department heads relate
organisational performance with the need for creative work and recognition; suggesting An evaluation
that public management should capitalize on their employees intrinsic motivation. In of employee
accordance with that direction is the strong and significant negative relationship
between position and security in the workplace. This finding may be attributed to the motivation
fact that due to the foundation for public sector modernization, traditional job security is
conceived to be counterproductive.
The demographic characteristics evaluated here include such variables as the age of 79
employees, marital status and gender. According to our results, they seem to comprise
another set of factors that affect very decisively the perceived relationship under
investigation. Marital status appears as the most influential item in this group, since
statistically significant relationships are observed between that variable and a number
of different motivators. In particular, married employees seem to place an
overemphasis on extrinsic rewards, since they conceive that improved performance
is positively associated with the provision of fair wages, incentives, security in the
workplace and better and safer working conditions. They also believe that public
management should recognize employees achievements, but not provide them
opportunities to take responsibilities; implying the improved operational efficiency
through the centralization of decision making. In our research, we found conflicting
evidence of the impact of gender on motivation preferences; however, previous
theoretical and empirical developments (e.g. Mowday et al., 1982) have confirmed that
females place more importance on intrinsic rewards. Here, the significant negative
relationship between gender and the provision of pay incentives and opportunities for
hierarchical advancement suggests that in public organisations females are more
extrinsically motivated. They also conceive that a safer working environment creates
the background for improved performance. On the contrary male respondents make a
direct relationship between performance and communication and cooperation in the
working environment and they consider that public managers should diversify
decision-making, providing their employees with more opportunities to take
responsibilities. Age seems to be another important factor that affect the
relationship between motivation and advanced performance. Results are in
accordance with the studies of Kovach (1995) and Jurgensen (1978) who found
differences in motivational preferences across age groups. Our findings indicate that
more aged employees believe that the satisfaction of individuals need for esteem,
reputation and competence, as well as the opportunity to take initiatives have a
positive impact on work outcomes. Thus, they conceive the provision of intrinsic
rewards as a statistically significant determinant of performance improvement. Taken
also into consideration the positive relationship between age, job security and the
provision of fair wages, it seems that, overall, more aged employees make a more clear
connection between motivation and performance. To finish, the finding in Table III
that relates employees in more technologically advanced sectors (aerospace) with a
more extended provision of intrinsic motives seems appropriate and is amplified here
in the significant negative association between energy and water supply sectors and
the motivators recognition for work and need for competence, respectively.

Conclusion and discussion


In light of the increasing attention devoted to public sector reform, public managers
need to reframe the essence of work motivation and its impact on organisational
ER performance. Whereas there are several theoretical studies that explore the issue, the
30,1 literature on research in public administration urges for more theory testing (Selden
and Brewer, 2000). In addition, most of the studies providing evidence on related topics
refer to managerial perceptions in economically advanced countries (notably the USA
and UK). The aim of the present paper is to investigate how the well established
foundation on the relationship between motivation and organisational performance is
80 reflected in the public sector of a more intermediate-level economy. In particular, we
have examined the issue of work motivation in Greece, being addressed to three
organisations where the state is a major stakeholder. More specifically, based on a
unique questionnaire-based survey we identified the extent of the provision of extrinsic
and intrinsic incentives and we examined which type of motivation has a positive
impact upon organisations performance. Since public sector must make the most of
motivational rewards it has to offer to attract and retain the more productive labor
force, we also associated the provision of specific motivational instruments (as a way
for performance improvements) with employees perceptions.
Our findings indicate that in the extended public sector of Greece public
administrators attempt to motivate their employees and improve productivity by
emphasizing on extrinsic rewards and more specifically by the provision of fair wages
and increased job security. However, the effectiveness of this pattern is strongly
questionable for the years to come for two reasons: First, some recent amendments to
the existing legislation and the restructuring and downsizing of the public sector in
Greece will lead to the decline of traditional job security (Portugal also seems to
comprise a similar interesting case). Second, partly as a result of the economic policy
adopted by the Greek governments, the increased level of unemployment in Greece
(approximately 10 per cent in 2005) and the fact that in recent years we have witnessed
an unparalleled decline in union membership in the public sector, it is hard to support
an optimistic scenario concerning an increase in the wage range that would satisfy
public servants. In addition, the evidence provided strongly challenges the benefits of
using external rewards as a way to trigger higher performance levels. Although pay
and benefits might inspire some people to excel in public sector jobs, our empirical
findings stress the importance of intrinsic incentives upon the performance of the
organisations under investigation. Finally, our results record the existence of a
multifaceted context of employees needs and satisfaction determinants, which is
strongly differentiated in relation to their demographic characteristics and ability.
Whereas, financial rewards continue to have considerable appeal among employees,
intrinsic incentives (creative work, recognition for achievements, more autonomy
within the workplace) seem also to generate high performance. This is another
argument to support the synergistic effect between extrinsic and intrinsic motivation,
indicating the complexity of the motivational construct and underling the difficulty to
capture effectively all its facets in a real world setting.
Our findings may have important implications for policy makers and public
managers. Perhaps the most important implication of the survey is that public
managers need a new conceptualisation of how extrinsic and intrinsic motivation
operates. According to Amabile (1993, p. 198), . . . if managers operate on the
simplistic scientific management notion that extrinsic motivation is always necessary
and always positive they can wonder into a hopeless quagmire. To the extent that
employees are more intrinsically motivated, they are likely to produce low quality
work and exit the organisation if given the opportunity. The observed inconsistency An evaluation
and failure to understand what motivates public employees may lead not only to poor of employee
job performance in the short term, but also to permanent displacement of a public
sector ethic in the long term (Crewson, 1997). One other possible implication of these motivation
findings is that public administrators should reframe their views concerning the
incentivisation of public sector and relate productivity with properly designed pay
schemes, in an attempt to link employees monetary rewards with the goals of the 81
organisation. However, employees who have the potentials to be more productive
(more experienced and educated) conceive that performance is related to the provision
of a multifaceted context of motivators, including both extrinsic rewards and intrinsic
motives. As a result, public managers should not consider only the provision of
extrinsic rewards contingent on performance, but also to emphasize on the provision of
meaningful, jobs that offers opportunity for creativity and personal advancement.
Like all research, the present survey has several limitations, which damper the
findings reported here and should be acknowledged. The most important relates to the
essence of the performance construct. Organisational performance is subjective,
complex and particularly hard to measure in the public sector (Au, 1996). The
performance indicator used in this research (volume of sales) has a lot of desirable
properties. It is be measurable, reliable and well-established in the literature; however it
is narrow, efficiency-related and may neglect other important dimensions of
performance, such as the quality of work or even equity and fairness. Moreover,
performance is dependent upon a variety of factors. In this study we have examined the
relationship between performance and motivation, however, in order to have a more
holistic understanding of the concept we should also examine the impact of other
constructs as well, such as leadership and supervision (for a review see Brewer and
Selden, 2000). Finally, we address the concept of geographic scope as a unidimensional
construct, not taking into account for the environmental diversities among countries.
Although we could expect similar findings for middle-income peripheral European
countries, we should be very cautious in generalizing the results for more advanced
economies. Being focused on a specific market (Greece) we minimize a number of sources
of extraneous variance. However, public sector performance is definitely influenced by
local political, economic and labour conditions. It is impossible to tell how much this
variance affects the results but we should recognize that it must have an influence. The
weaknesses of the present survey provide suggestions for future research. Despite
limitations and the fact that there is always room for error in any questionnaire based
research; evidence seems to provide interesting insights for our initial intentions. We
hope that this study will help to reinvigorate the exploration of similar topics.

Notes
1. This research is part of a wider study related to the motivational characteristics of
employees in Greece.
2. We only included respondents who answered all relevant survey questions.
3. All additional information is available from the authors.
4. Even the fact that the one-fourth of our pseudo R square values are lower than 0.15,
according to Maddala (1983, p. 38) in cases where R square is calculated on a scale that
depends on how often dependent variables can take specific values it is typical to get low R
square values, without that being an indication of a poor model.
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Appendix An evaluation
of employee
motivation

85

Figure A1.
Survey question

About the author


Dimitris Manolopoulos earned his PhD in Strategic Management from the University of Reading.
His areas of specialization include business strategy, international business and human resource
management. He has been working as a business consultant for several years. From 2001 and
onwards, Dr Manolopoulos has been a professor at the Business School of the American College
of Greece. From 2006, he has been a visiting professor at the Management Science and
Technology department of Athens University of Economics and Business. He has been
published several times in leading international academic journals. Dimitris Manolopoulos can
be contacted at: dman@acgmail.gr

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