Predicting organizational performance from motivation in Oromia Seed Enterprise Bale branch

The study addresses how intrinsic and extrinsic motivation relate to and predict organizational performance, grounded in cognitive evaluation theory. Motivation is central to organizational psychology and performance, influencing productivity, retention, and organizational success. While intrinsic motivation derives from internal satisfaction with the activity itself, extrinsic motivation stems from external rewards or avoidance of punishment. Prior theory suggests extrinsic incentives can undermine intrinsic motivation, yet empirical results are mixed. Ethiopian studies have largely relied on descriptive statistics without strong theoretical grounding or causal analysis, leaving gaps regarding the direct, combined, and potential undermining effects of extrinsic on intrinsic motivation in predicting performance. This study aims to assess the effects of extrinsic motivation on intrinsic motivation and organizational performance in the Oromia Seed Enterprise, Bale branch, to provide causal insights and contribute evidence from the Ethiopian context.

The introduction reviews classic and contemporary motivation theories, including Maslow’s hierarchy of needs, Herzberg’s two-factor theory, Vroom’s expectancy theory, Locke’s goal-setting, Bandura’s self-efficacy, and self-determination theory’s cognitive evaluation perspective. Intrinsic motivation is defined as engagement driven by inherent interest and satisfaction, whereas extrinsic motivation involves behavior driven by external rewards or sanctions. Cognitive evaluation theory posits extrinsic rewards may undermine intrinsic motivation, yet reviews (e.g., Kanfer et al., 2017) indicate mixed empirical findings—some supporting undermining effects, others not. In Ethiopia, prior studies commonly examined motivation’s effect on performance using descriptive approaches without separating intrinsic and extrinsic components or testing interactions, limiting causal inference. This study addresses these gaps by applying logistic regression to test main and interaction effects of intrinsic and extrinsic motivation on organizational performance.

Design and approach: Explanatory research design with a quantitative approach to examine cause–effect relationships among extrinsic motivation, intrinsic motivation, and organizational performance. Population and sampling: Census of all 119 employees at Oromia Seed Enterprise, Bale branch (12 supervisors, 77 professional experts, 30 supporting staff). Usable responses: 106 (89% response rate). Data collection: Likert-scale, close-ended questionnaires. Informed consent obtained prior to participation. Measures:

• Extrinsic motivation: 13 items on a three-point scale.
• Intrinsic motivation: 9 items on a three-point scale.
• Organizational performance: 8 items on a five-point Likert scale, later dichotomized into poor (0) and good (1) for logistic regression. Data analysis: SPSS v20; descriptive statistics (frequency, percentage, mean), correlation analysis, and binary logistic regression. Reliability assessed via Cronbach’s alpha (all ≥0.701). Assumption checks included multicollinearity (none problematic), binary outcome coding, residuals (Cook’s distance and DF Beta < 1), and outliers (none detected). Model fit assessed by Hosmer–Lemeshow test and classification accuracy. Model specification: Logit model with intrinsic and extrinsic motivation as predictors and their interaction term. Odds ratios reported for categorized motivation variables with “Disagree” as the reference category.

Sample profile: 59.4% male and 40.6% female respondents; age and role distributions indicate male dominance, especially in supervisory roles. Motivation levels: Summated mean scores indicated presence of both motivations—extrinsic motivation mean = 2.36 (SD ≈ 0.66) across 13 items; intrinsic motivation mean = 2.34 (SD ≈ 0.64) across 9 items (three-point scale). Organizational performance: Grand mean = 3.62 (five-point scale), indicating perceived good performance; highest components: profitability (mean 3.91) and customer satisfaction (3.71); lowest: employee loyalty (3.49). Reliability: Cronbach’s alpha—extrinsic motivation 0.751, intrinsic motivation 0.701, organizational performance 0.715. Correlations: Organizational performance positively and moderately correlated with extrinsic motivation (r = 0.399, p < 0.01) and intrinsic motivation (r = 0.418, p < 0.01). Extrinsic and intrinsic motivations also positively correlated (r = 0.414, p < 0.01). Model fit and variance explained: Logistic regression correctly classified 72.6% of cases; Hosmer–Lemeshow p = 0.983 (good fit); approximately 36.5% of variation in organizational performance explained by intrinsic and extrinsic motivation. Logistic regression effects: Relative to those who disagreed about the presence of motivation, employees who moderately agreed showed significantly lower odds of poor performance for: extrinsic motivation OR = 0.057, p = 0.019; intrinsic motivation OR = 0.033, p = 0.027. Interaction effect (extrinsic × intrinsic) on organizational performance was not significant (p = 1.000), indicating no moderating interplay when both motivators are present simultaneously. Theoretical implication: Results do not support the cognitive evaluation theory proposition that extrinsic motivation undermines intrinsic motivation in this context.

Findings demonstrate that both intrinsic and extrinsic motivation are present at moderate levels and each positively relates to and significantly predicts organizational performance. The lower odds of poor performance among employees perceiving moderate intrinsic or extrinsic motivation suggest that enhancing either form of motivation can improve organizational outcomes. The nonsignificant interaction indicates that simultaneous presence of extrinsic and intrinsic motivation does not produce an additional moderating effect on performance; thus, extrinsic incentives did not undermine intrinsic motivation in this setting. These results address the research question by providing causal evidence, using logistic regression, that both motivation types contribute to performance without detrimental interplay, informing theory and practical motivation system design in Ethiopian public enterprises.

The study contributes causal, theory-driven evidence from the Ethiopian public sector that both intrinsic and extrinsic motivation independently and positively predict organizational performance, while their interaction is not significant—counter to the undermining hypothesis from cognitive evaluation theory in this context. Empirically, moderate levels of either motivation are associated with reduced odds of poor organizational performance, and organizational performance is perceived as good overall. Contributions include strengthening the theoretical and methodological rigor in the Ethiopian context, informing managers to implement practical motivation systems that consider both intrinsic and extrinsic drivers, and providing insights for policymakers to enhance incentive systems in public organizations. Future research directions: Incorporate additional moderators (e.g., autonomy) to test more complex relationships; employ structural equation modeling to explore latent constructs and mediation; conduct longitudinal designs to assess effects over time; expand sampling to multiple seed enterprises and sectors to improve generalizability.

Scope was limited to intrinsic and extrinsic motivation and their interaction, excluding other potential moderators or mediators (e.g., autonomy). Use of binary logistic regression, while suitable for the dichotomized outcome, may not capture more complex relationships among constructs. The cross-sectional design restricts causal inference over time. The study focused on a single enterprise (Bale branch) due to budget constraints, limiting generalizability to other organizations or regions. Data are not publicly available due to confidentiality.