Critical assessment of intrinsic and extrinsic employee motivational factors in the Libyan oil and gas sector

Master's Thesis, 2015

57 Pages


Table of Contents


Executive Summary

List of figures

List of tables

1.1 Background to the Research
1.2 Research Aim and Objectives
1.3 Justification of the study
1.4 Outline of Chapters
1.5 Definitions

2.1 Conceptual Framework
2.2 Concept of motivation
2.3 Intrinsic and extrinsic motivation
2.4 Maslow’s Hierarchy of Needs Theory
2.4.1 Management application of Maslow’s theory
2.4.2 Motivational factors derived from Maslow’s theory
2.5 Herzberg theory
2.5.1 Management application
2.5.2 Motivational factors derived from Hertzberg Theory
2.6 ERG Theory of Motivation
2.6.1 Management application
2.6.2 Motivational factors derived from ERG theory
2.7 Goal setting theory
2.7.1 Management application
2.7.2 Motivational factors derived from Goal-setting theory
2.8 Expectancy theory
2.8.1 Management application
2.9 Link between Locus of Control and Motivation
2.10 Summary

3 Methodology
3.1 Research Design
3.2 Research theory
3.3 Sample
3.4 Instrument
3.4.1 Questionnaire structure
3.4.2 Questionnaire design
3.4.3 Testing and distribution
3.5 Validity and reliability
3.6 Data analysis
3.7 Research ethics
3.8 Summary

4 Results and Discussion
4.1 Introduction
4.2 Data validity and reliability
4.3 Demographics
4.4 Ranking of motivational factors
4.5 Motivation of employees in Mellitah
4.5.1 Rewards
4.5.2 Goal-setting
4.5.3 Feedback
4.5.4 Job features
4.5.5 Salary
4.5.6 Growth chances
4.5.7 Working conditions
4.5.8 Recognition
4.5.9 Trainings
4.5.10 Job responsibility
4.5.11 Job security
4.5.12 Performance evaluation
4.5.13 Leadership
4.6 Locus of Control
4.7 Summary of findings

5 Conclusions and Recommendations
5.1 Introduction
5.2 Conclusions
5.3 Recommendations
5.4 Future research

6 References

7 Appendix A


Foremost, I am highly thankful to Almighty GOD who helped me successfully complete this dissertation in a short time period. I also want to express my sincere gratitude to my supervisor Vicky Craven for her continuous support throughout dissertation period. Her feedbacks really helped me a lot to improve this research. I could not have imagined having a better advisor and mentor for my study. Last but not the least, I would like to thank my family: my parents, wife, and siblings for their morale support all the times.

Executive Summary

Motivation is an interesting and researched topic and so is employee motivation. It has been found by various researchers that motivated employee perform better and help achieving the organisational goal. Therefore, motivating them ultimately benefits the company. Hence, it is important for organisations to know the intrinsic and extrinsic motivational factors and their effects on their employees. Companies should also know the link between employee motivation and their locus of control. This study was conducted to find these aspects of motivation in Libyan oil and gas sector. Mellitah was selected as the population of the study. Findings showed that a positive relation exists between extrinsic and intrinsic factors and employee motivation (with some exceptions). Also, the findings concluded that internal locus of control is also positively related to motivation of the employees. However, further research was recommended by the researcher to investigate other aspects of the concept.

List of figures

Figure 1: Chapters’ outline

Figure 2: Conceptual framework of the study

Figure 3: Maslow’s Need Hierarchical Framework (Maslow, 2013)

Figure 4: Two Factor theory (Borkowski, 2009, p. 112)

Figure 5: Gender of respondents

Figure 6: Experience of respondents

Figure 7: Qualification of respondents

Figure 8: Position of respondents

Figure 9: Graphical representation of motivational factors

List of tables

Table 1: Motivational vs. Hygiene factors (Keijzers, 2010, p. 9)

Table 2: Summary of motivational factors

Table 3: Reliability test

Table 4: Ranking of motivational factors

Table 5: Comparison between Maslow’s hierarchy of needs and ranking

Table 6: Ranking of locus of control factors

Table 7: Summary of study findings


1.1 Background to the Research

Motivation is a highly researched topic due to its importance in company performance and profits. The earliest theories of motivation came on scene in the early half of 20th century. These theories were Maslow’s Hierarchy of Needs and Herzberg’s Two Factor Theory. Another important theory was Vroom’ Expectancy Theory. These theories gave an idea of motivation but focused more on employee motivation. Various definitions of this concept also emerged. For instance, Herzberg (2008) said that motivation the performance behaviour of employees to the task which they are willing to carry out.

Staw (1976) showed that motivation can be categorised as intrinsic or extrinsic. According to Staw (1976), Herzberg’s Two Factor Theory was the original generator of this distinction of motivation in to two types. But, the contributing explanation of these types appeared in research after many years (e.g. Amabile, 1993 and Deci, 2012). The important aspect of this research is the employee related effects of intrinsic as well as extrinsic motivation (Sansone & Harackiewicz, 2000). This relationship has also been researched by many scholars (Dobre, 2013; Muogbo, 2013; Roos & Eeden, 2008). However, the high degree of interdependency and importance of these two types has never been given before.

Recent studies have shown that intrinsic and extrinsic both motivations are important in employee behaviour. It was also found that motivation causes better performance from employees (Aarabi, Subramaniam & Akeel, 2013). This particular relation is the basis of this research study too. This research’s objective is to find useful insight in to this topic for the utility of managers and company in oil and gas sector.

Motivation is a complex concept. It can be explained in many ways. Similarly, motivation can be caused in various ways too. Many researchers have given different perceptions of motivation. However, this bulk of research and theories on motivation have affected the way company’s plan organisational behaviour. Older theories like Herzberg’s Theory are still in practice due to its contributions. Staw (1976) claimed that Herzberg was one of the pioneers of the research path on this concept and gave the distinctive types of motivation.

This chapter gave definitions of the basic concepts of the study. It gave light to Maslow’s and Herzberg’s theories which formed the basis of current research on motivation. The chapter also explained the basic concepts of intrinsic and extrinsic motivation. This distinction helps in identifying the relationship of motivation and employee behaviour.

1.2 Research Aim and Objectives

The core research aim is to critically analyse the intrinsic and extrinsic motivational factors affecting Mellitah employees in Libyan oil and gas sector. The following objectives are formed to achieve research aim.

1. To investigate the motivational factors (both intrinsic and extrinsic) in light of the literature
2. To find out how these factors can affect employee motivation in Libyan oil and gas sector
3. To explore the relationship between employee motivation and locus of control

1.3 Justification of the study

It is believed that motivation among employees is a topic which has been researched considerable times. Maslow and Herzberg laid foundations to this research. Different researchers presented different definition of motivation. Herzberg (2008) defined motivation as the willing completion of a job task. Some attributes of the motivation lead to disagreement among the researchers. But all of them agreed to some common features of motivation including individual nature of motivation. It has also been described as willing effort which is complex. Furthermore, different theories were given for motivation to know human behaviour.

Many researchers clarified the difference between intrinsic and extrinsic types of motivation. An employee is said to be extrinsically motivated when his behaviour is directed to achieve his work related goals. On the other hand, intrinsic motivation is seen when employee tries to find satisfaction through his inner interest, likes, and challenges at workplace. Both of these motivations are important for employees of an organisation. Therefore, companies should let their managers know that they are responsible for these factors. Managers are the ones who carry out motivators as well as hygiene factors to keep their employees motivated.

Employees can be motivated by either types of motivation or by both at the same time. She explained that it is also dependent on the nature of the jobs as well. Some jobs bring about intrinsic motivation whereas some causes extrinsic. This idea was supported by Deci (2012) who said that job can motivate employee who can work towards better performance.

Some jobs are only focused on extrinsic motivation. But, on the other hand, Herzberg’s Two Factor Theory contradicts by explaining that extrinsic factors which can be called as hygiene factors are not responsible for motivation. The levels of performance at such places can be because of intrinsic factors. It was also found that extrinsic motivation alone is not sufficient and cannot enhance performance on its own. But, some of the attributes of extrinsic motivation can cause better performance but in conjunction with intrinsic ones.

Motivation is a multifaceted phenomenon and cannot be described with simplicity. This is because every person is different and is affected by different factors. Organisations utilize this information along with variety of other resources to stay competitive. As compared to all other resources, human resource is the one which can be enhanced in terms of capacity building. It happens more when it is developed more. It is never recommended for organisations to diverge their focus from human resource. Managers must keep their employees motivated in order to bring about the most efficient performance and potential out of the employees. However, companies face the issue of employee capacity development which is the way to improve their talents and keep them motivated. This is the same in South African industry.

Employees and their behaviours bring out the effective production levels which cause profitability of the company to increase. Therefore, their behaviours must be kept motivated positively in order to achieve these higher levels of performance. This important rule is expected to be performed by managers of the employees. Therefore, their knowledge about the importance of motivation and effects of internal and external motivators is very crucial too.

Thus, it can be said that motivated employees are important for company’s success. The companies need to implement plans to motivate employees. This is an on-going process because if the motivation level of the employees drop, the company suffers. Its performance graph declines. However, keeping the employees motivated helps company in achieving its objectives. It causes the growth of the organisation by increased output and quality products. Motivated employees will create a positive organisational culture. But, according to Fox (2007), one plan does not fits all. The same factor can cause negative motivation in some employees.

Hence, the companies’ increasing focus on motivation and its factors is explainable. It is necessary for them to know what factors cause motivation and what the individual impacts of these factors are. Only after careful analysis of these factors, it can establish proper plans to keep employees motivated.

1.4 Outline of Chapters

Figure 1 demonstrates the outline of chapters with their description

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Figure 1: Chapters’ outline

1.5 Definitions

Motivation - “Motivation is a way in which urges, desires, aspiration, striving or needs direct, control or explain the behaviour of human being” (Mukherjee, 2005, p. 114)

Intrinsic motivation - “Intrinsic motivation can be defined in terms of structure (i.e. when an activity is associated with one and only one goal) and in terms of substance (i.e. when the content of the goals matters)” (Sansone & Harackiewicz, 2000, p. 445)

Extrinsic motivation - “Extrinsic motivation can be defined as (1) when motivation is based on something extrinsic to the activity, and (2) when motivation is based on something extrinsic to the person” (Sansone & Harackiewicz, 2000, p. 445)

Locus of control - “Locus of control refers to the extent to which individuals believe they can control events affecting them” (Ahmed et al., 2008, p. 101)


2.1 Conceptual Framework

It is clearly stated in the conceptual framework in Figure 2 that the motivational factors (both intrinsic and extrinsic) are positively linked with employee motivation, and therefore have great influence on it.

Figure 2: Conceptual framework of the study

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Based on the above diagram, the following study hypotheses can be formulated.

H1 – The intrinsic motivational factors are positively correlated with employee motivation

H2 – The extrinsic motivational factors are positively correlated with employee motivation

H3 – Local of control is positively correlated with motivation, and has a great influence on employees

2.2 Concept of motivation

Motivating employees is a need of every manager. Luaby (2005) questioned the reason behind this. The answer to this was given by Mohsan, Nawaz et al (1994). They believed that in order to sustain the competitive advantage in a rapidly changing business environment, the employees should be motivated and ready. The companies should learn the importance of motivating the employees and their managers must be capable of understanding the motivational factors of the employees. Amabile (1993) believes that this understanding and capability to motivate the employees is necessary to sustain the competition in the coming century as well. According to her, if employees are not motivated enough, they will not work hard and will not give their time and effort to the company. Also, unmotivated employees tend to leave the company and if they stay, their work quality declines. On the other hand, motivated employees help in surviving and growing the company (Smity, 1994). Motivating employees is not simple. So far, it is the most difficult task faced by managers. This is because of ever changing needs of employees and factors that motivate them (Linder, 1998).

The history of the use of motivation to refer to effortful human behaviour shows that the term evolved in early 1880s. Before this time, scholars and philosophers used the word “will” to denounce the same meanings of directed efforts of human beings (Ahmed & Mohamud, 2015). In 1880s, theorist believed that motivation is the word which shows the drive to behave in a certain way. This earliest definition evolved over time. According to the definition given by Gupta and Tayal (2013), motivation is the process which provides the directed to behaviour. Linder (1998) defined motivation as the predisposition which brings out purposeful, goal-oriented behaviour. Motivation has also been defined as internal compelling force towards need gratification (Aworemi, Abdul-Azeez & Durowoju, 2011). Deci (2012) termed it as the willingness to get. The analysis of these definitions shows that there is one common factor in all these definitions despite the apparent variance. Weiner (2013) states that all the definitions converges at the idea that motivation is individual-based. Furthermore, it is planned, deliberate, complex and somewhat predicts the human behaviour. Motivation must not be confused with the concept of behaviour. It derives behaviour but it is not behaviour itself. Motivation brings about certain actions. It encompasses those internal or external pulls that drive the actions of a person (Mackay, 2010). In relation to this, Mitchell (1982) proposes his own definition of motivation: “motivation becomes the degree to which an individual wants and chooses to engage in certain specified behaviours” (p. 82).

2.3 Intrinsic and extrinsic motivation

Motivation is of two types. These types are intrinsic motivation and extrinsic motivation. The comprehensive definitions of these two types were given by Amabile (1993). According to Amabile (1993):

Intrinsic motivation is the motivation of individuals which they find in the activities for their own self for instance hobbies, challenging work, interests, freedom of expression.

Extrinsic motivation occurs when the external factors cause motivation. This happens when people accomplish some task for a particular set goal for instance money or promotion.

According to Deci (2012), intrinsic motivation can be initiated when a person finds it satisfactory from inside. On the other hand, extrinsic motivation arises as a result of some monetary or behavioural rewards which are external to the individual. Intrinsic motivation leads to performing even those jobs which might not reap any physical reward. Amabile (1993) further states that employees can have one of these motivation types or they might be motivated in both ways.

It is not necessary that everyone responds alike to the intrinsic and extrinsic motivation. According to Vroom (1964), some of the people are more motivated by extrinsic factors whereas Ndirtagu (2013) argues that some are attracted to intrinsic motivation factors. Those employees who are intrinsically motivated likes to perform challenging tasks. They can manage their selves better than other. It is useless to bound them in deadlines and boundaries (Story, Hart, Stasson & Mahoney, 2009). According to Story et al (2009), these employees should be provided a chance to work on their own goals according to their plans.

It also happens that different employees react differently to the same type of task. This is because of varying levels of the need for growth (Williams, Myerson & Hale, 2008). If this growth need strength is high in an employee, he will be likely to prefer performing those jobs which involve skills, significant work, authority, independence and response. On the other hand, those who are low in growth need strength will not be affected by such jobs. According to the similar findings by Lin (2007), extrinsic motivation is behind the introverts whereas extroverts are more intrinsic.

This discussion shows that mangers should keep their employees motivated in order to archive the goals. Furthermore, it can be said that motivation is individual based. It depends on the intentions of a person. Moreover, as described above, motivation is a complex concept. It is related to behaviour but is not behaviour itself. Herzberg and Maslow were the pioneers in developing motivation theories.

From this discussion, it can be seen that these two types of motivation are clearly different. But these two are correlated and affect each other too. According to Deci (2012), the extrinsic motivators can sometimes curb the development of intrinsic motivation. For instance, money can decrease a concentration toward intrinsic motivation. But, for this affect, the money should be used efficiently to get this result. However, Amabile (1993) gave a contradictory study which suggested that these two motivations can also complement and enhance each other. Just like Maslow’s Needs where individual moves to higher levels after the fulfilment of lower level needs, once extrinsic factors are complete, the individual can be lead to extrinsic motivation. Amabile further claimed that these types of motivation do affect employee behaviour at work sometime separately and sometimes together. But, these affects can be diverse.

Hence, it can be said that employees can be either intrinsically motivated or extrinsically motivated or both and this motivation can differ depending on the task as well (Amabile, 1993). It can also be said that these two types of motivations are interrelated and affect each other positively (most of the time) and negatively (few times) (Deci, 2007). Based on above, the first two hypotheses assume that “The intrinsic motivational factors are positively correlated with employee motivation” (H1); and “The extrinsic motivational factors are positively correlated with employee motivation” (H2).

2.4 Maslow’s Hierarchy of Needs Theory

Maslow gave grounds to Herzberg’s Two Factor Theory. His famous Hierarchy of Needs modelled became a base for many succeeding theories. According to Maslow, human needs motivate their behaviour. He categorized these needs in to 5 types named as basic physical needs, needs for security, need for love and socialization, self-esteem and self-actualization. And “we are motivated by the desire to achieve or maintain the various conditions upon which these basic satisfactions rest and by certain more intellectual desires (Goble, 2004,). This model shows that human needs gradually rise to the higher levels of this hierarchy after the fulfilment of the lower levels. The needs at lower level are the basic physical needs, need for love and belongingness and security. The higher level contains the advance needs of self-esteem and actualisation (Maslow, 2013). But, all these needs do not cater to same motivation in individuals. According to Daniels (2005), the higher level needs relate to intrinsic motivation and deals with a person’s individuality. Same argument was given by Maslow (2013). He states that self-actualisation can never be called extrinsic because it deals with inner health and peace. Maslow’s Need Hierarchy Model is given in Figure 3.

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Figure 3: Maslow’s Need Hierarchical Framework (Maslow, 2013)

The Need’s Theory by Maslow became the base for Herzberg’s Two Factor Theory. He categorized these needs further in to two categories called motivators and hygiene factors. Mackay (2010) stated in his research that Herzberg’s theory was the first time that motivation was divided in to intrinsic or extrinsic. According to Herzberg, satisfaction and dissatisfaction are not separate or different (Riley, 2005). Gawel (1997) said that the motivators given by Herzberg’s theory are related to the higher levels of Maslow’ Hierarchy.

2.4.1 Management application of Maslow’s theory

Managerial applications of Maslow’s theory have not been supported by any research study. There is no particular evidence of the importance of Maslow’s theory itself in research. However, it can still be related to managerial efforts towards employee motivation. It has been seen that once a need is satisfied, it loses its importance and hence the motivational level falls pertaining to it. At this stage, managers must identify the next need which is activated and fulfil it in order to keep the employee motivated (Kreitner & Kinicki, 2008).

One such implication can be seen when employee’s need for basic physiological means are satisfied by company though wages, commissions and compensations. Similarly, job security and status targets the second level needs of hierarchy. Further, in order to provide for the social needs of the employees, managers can utilize teams and group task. Smit et al (2007) stated that this order can be enhanced to target higher levels of needs as well. For instance, self-esteem can be satisfied by providing fair amount of approval and appreciation to employee efforts. Companies usually do this by means of performance based salary appraisals. And the highest level needs of self-actualization in this hierarchy can be targeted by providing chances for performance-based promotions, authority delegation, challenging tasks, higher level trainings and self-control over their jobs.

2.4.2 Motivational factors derived from Maslow’s theory

The following factors can be identified through Maslow theory.

Employee’s salary, wages, compensation and benefit schemes, insurance, contract periods, securities, job environment and organisational culture define the level of satisfaction of first three levels of needs in Maslow’s hierarchy.

The rest of the two levels of needs located at the apex of this hierarchy can be reached by means of performance-based recognition, appreciation, training and development chances, work freedom, sufficient authority, openness to innovation and chances for growth.

2.5 Herzberg theory

Herzberg gave his famous Two Factor Theory on motivation which became a base for further research on the subject matter. In this theory, Herzberg said that there are two types of factors namely motivators and hygiene factors. According to him, the employee can be affected by either motivators or hygiene factors but cannot be affected by both at the same time. According to the research of Day (2013), the nature of motivators is intrinsic. This factor includes recognition, achievement, responsibility and challenging tasks. Hygienic factors are, however, extrinsic as said by Kandula (2003). Although, these two factors treat different types of motivations but are not very different from each other. Because they both deal with motivation which is the force which encourages a person to perform his job (Herzberg, 2008). The table below shows the basic list between the motivators and hygiene factors. The Hygiene factors are believed to cause dissatisfaction if not present whereas a presence of motivational factors causes satisfaction.

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Table 1: Motivational vs. Hygiene factors (Keijzers, 2010, p. 9)

The analysis of this theory by Bagraim et al (2007) showed that negative factors at a job are quite different from the positive ones. It also showed that internal factors are given the credit for all the happiness and satisfaction by the job. However, he attribute the negativity or bad feelings related to his job toward the external factors which shows the biasness. Bagraim et al (2007) also said that the motivating factors of this theory are perceived internal whereas the dissatisfaction related factors are extrinsic in nature. The Figure 4 depicts the Two Factor theory very aptly by showing the satisfaction and no satisfaction states as two different poles. It also shows the difference between job dissatisfaction and no job dissatisfaction. No job dissatisfaction does not mean satisfaction in this case.

According to Nel (2004), the idea of job enrichment came in to existence as a result of Herzberg’s theory who told that job design is important in introducing motivators and fulfil hygiene factors. Job enrichment is the process whereby the tasks are made challenging and attractive along with competition, justice, recognition and growth chances. The hygiene factors identified by Nel et al (2004) include salary, job rank, policies and procedures, supervisor, environment, job’s social capabilities and security. They enlisted the motivators to be job recognition, appreciation, growth, professional and personal growth, promotion, challenges at job and on-time feedback.

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Figure 4: Two Factor theory (Borkowski, 2009, p. 112)

However, Nel et al (2004) believed that the Two Factor Theory cannot be linked with Maslow’s Hierarchy. According to their study, the employees in case of Herzberg’s theory are currently motivated by satisfying their lower order needs of Maslow’s theory and only higher level needs need addressing.

2.5.1 Management application

The managerial application of this theory was also given by Herzberg through his two steps just like two factors. He suggests that first the hygiene factors need to be introduced. For this, the manager must identify the dissatisfaction elements and try to get rid of them in order to create no dissatisfaction state. Next step is to take an employee towards satisfaction stage by introducing motivator factors. This division was done because hygiene factors are basic whereas motivators are complex and advance (Griffin & Moorhead, 2009).


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Critical assessment of intrinsic and extrinsic employee motivational factors in the Libyan oil and gas sector
University of Chester
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Oil and gas sector, motivational factors, intrinsic and extrinsic motivation
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Muhammad Saeed (Author), 2015, Critical assessment of intrinsic and extrinsic employee motivational factors in the Libyan oil and gas sector, Munich, GRIN Verlag,


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