EFFECT OF EMPLOYEE MOTIVATION ON ORGANIZATIONAL PRODUCTIVITY IN PAKISTANI SMES

Abstract

The following paper aims to determine the link between motivation and productivity as factors relevant to SMEs based in Pakistan. The research adopted a survey design, and the recipients of the structured questionnaires included 378 employees and 83 managers across various industries. This study compared five motivational devices: financial remuneration, job environment, promotion, appreciation, and first-level managers on the productivity level. Simple linear regression was used in statistical analysis and showed a positive correlation between all the motivational factors and productivity, with financial incentive standing at 0.72 and the work environment at 0.68. It was revealed in the multiple regression analysis that the a forementioned variables efficiently predict organizational productivity because the amount of variance that was explained by these variables was 67.3 percent. Further, the analysis of the results according to the categories indicated that manufacturing SMEs had the highest correlation between recognition and performance, whereas service-oriented enterprises hadhighercorrelations between leadership style and production performance. The study further recommends that Pakistani SME owners develop sound motivational programs that are most suitable for their industry, with concentration made on offering the employees reasonable incentives and enhancing the work environment.

keywords :Employee motivation, organizational productivity, Pakistani SMEs, financial incentives, work environment, career advancement, employee recognition, leadership style