EFFECTS OF MOTIVATION ON EMPLOYEES’ PERFORMANCE IN BANKING SECTOR IN TANZANIA

Abstract

This study examined the effects of motivation on employees’ performance in the banking sector, focusing on Equity Bank Tanzania, Arusha Branch. The research problem stemmed from declining morale, reduced productivity, and increasing turnover among employees, attributed to inadequate motivational practices. The study specifically aimed to determine the types of motivation provided to employees, assess the effect of motivation on their performance, and analyze challenges hindering effective motivation at the branch. Guided by a pragmatism philosophy, the study employed a mixed-methods approach within a case study design. The target population comprised 84 employees, from which a sample of 69 was drawn using purposive and simple random sampling. Data were collected through questionnaires, semi-structured interviews, systematic observation, and documentary reviews. Quantitative data were analyzed using descriptive statistics, Pearson correlation, and multiple linear regression, while qualitative data were analyzed thematically. Findings under the first objective revealed that employees received both intrinsic motivators (such as training, recognition, feedback, and career growth) and extrinsic motivators (including salary, bonuses, and promotions). However, intrinsic motivation was found to be less emphasized than monetary rewards. Under the second objective, the Pearson correlation results showed a moderate positive relationship between motivation and employee performance (r = 0.541, p < 0.01), but regression analysis indicated that intrinsic and extrinsic motivation jointly explained only 0.6% of performance variation, implying that other factors like supervision, workload, and organizational culture also affect performance. Regarding the third objective, major challenges identified included inadequate recognition, limited communication, unclear promotion criteria, poor leadership support, and excessive workload. The study concluded that motivation plays a role in enhancing employee engagement and satisfaction but has a limited direct effect on performance unless supported by fair policies, effective leadership, and conducive work conditions. It recommended strengthening intrinsic motivation through recognition, career development, feedback systems, and leadership engagement, alongside equitable pay and incentives to enhance sustainable employee performance