The Correlation Between Motivation and Employee Satisfaction in the Service Industry

Abstract

This paper aims to analyse the correlation between the two dimensions of motivation (intrinsic and extrinsic), rewards and recognition, and employee performance, being one of the first studies to tackle this problem in the context of the service industry of Southern Romania. The data was collected using a quantitative survey of 161 employees from various service industries, such as retail, hospitality, healthcare, and professional services. The results were analysed using partial least square structural equation modelling (PLS-SEM) using SmartPLS4.10 software. Our findings have shown that there is a strong, positive relationship between intrinsic motivation, on the one hand, and extrinsic motivation, on the other hand, and employee satisfaction, as well as between rewards and recognition and extrinsic motivation. Moreover, our research did not find a significant correlation between rewards and recognition and intrinsic motivation, maybe due to the way reward and recognition (RR) was constructed, most items being related to financial, tangible rewards, which tend to have a more significant influence on extrinsic motivation (EM) rather than intrinsic motivation (IM). Our findings might be of use for service managers to better understand how to motivate their employees in order to ensure their maximum performance.