The on the other hand intrinsic rewards relate to

The relationship
between reward structure and motivation is quite difficult to determine.
Motivation of employees is an important factor in success of an organization, an
organization with right rewards is able to attract right employees and keeps
them motivated. During past employee surveys conducted within ASML, an
important question was always missing which kind of rewards intrinsic or
extrinsic motivate ASML employees. This aim of this paper is to determine
within ASML, an original equipment manufacturer of lithography systems for
semiconductor industry, which kind of rewards intrinsic or extrinsic motivate
employees, also to find out if employees are satisfied with current reward
structure of ASML. In order to determine relationship between rewards and job
satisfaction a survey was conducted within ASML. The questionnaire was taken
from existing research conducted by (Tremblay et al,2009) other questions were taken from [email protected] survey
which is conducted every two years internally within ASML. Questionnaire was
distributed to random employees within ASML, Veldhoven campus who were working
in different departments like marketing, quality, design and engineering,
supply chain. Due to time limitation only 36 respondents were analyzed.


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In today’s fast growing economy organizations can benefit from motivated
workforce. Motivated and engaged employees are wanted by every organization.  (Deci and Ryan,1985) describe motivation as an
important factor in success of an organization as it leads to results. Rewards
such as bonus, non-monetary, psychological payments are provided by an
organization to its employees to keep them motivated, increase their performance
and reduce attrition rate. Rewards schemes can be classified into extrinsic and
intrinsic, extrinsic rewards refer to items such as financial payments, bonus,
promotion, working conditions (fringe benefits) on the other hand intrinsic
rewards relate to satisfaction derived from doing the work, recognition, word
of praise from senior management or peers. There has been a long debate amongst
researchers which kind of rewards intrinsic or extrinsic motivate employees.

The primary reasons why organization provide benefits to employees are:
(Ryan, 2013)

To motivate employees

To recruit best talent and
retain it

To align organization’s goals
with its employees

To align risk preferences of

In today’s
challenging environment human resource is the most important resource for any
organization. Motivation is one of the main factors that drives employees to
work , also has major influence on their performance. Organizations like ASML
need to understand what are the underlying factors in motivating people, is the
work force more intrinsically or extrinsically motivated? Although every two
years [email protected] survey is conducted to understand in which areas ASML does well
and which areas need improvement. The [email protected] survey consists of several themes
like commitment, engagement, efficiency, role clarity, vitality, customer
focus, work atmosphere, retention factor, however it does not specifically
cover motivation dimensions like intrinsic or extrinsic. By doing this small
research these motivation dimensions can be highlighted.

Objective of the research

There have been
many researches that have been conducted in the area of rewards and employee
satisfaction, an increasing frame of evidence states that measuring the
effectiveness of reward practices has quite some benefits for employers. Like
any organization it is essential for ASML to hire and retain best staff. Satisfied
employees stay longer and contribute positively to the work environment,
therefore it is necessary to understand the relationship between rewards and
employee satisfaction. In order to study this relationship this paper aims to
find out if current ASML employees are satisfied and motivated with rewards
they get, also the paper aims to find out which kind of rewards (extrinsic,
intrinsic) are preferred by ASML employees. The results of this study will be
presented to the human resources department, they can further expand the sample
which could provide them with better results. In this paper non-parametric
statistics as well as descriptive statistics is used to analyse the results.
The method used in this study can be used further for a large sample.




Different Motivation theories

Researches related
to motivation have been conducted for a very long time, theories related to
motivation and organizational behaviour can be applied to different
organizations, some important theories which are widely used discussed in this
paper are given below

Self-Determination Theory :
which investigates “people’s inherit growth tendencies and innate psychological
needs that are the basis for their self-motivation and personality
integration.” (Deci and Ryan,1985 pp 68). The SDT1
discusses that people can be motivated by very different types of factors like
valuing an activity, internal or external pressure, the experiences and
consequences of factors related to motivation can be quite diverse. Behavior of
people can be influenced by sense of personal commitment to grow or from fear
of being watched by someone. Experiments related to “intrinsic motivation”
reveal that people as well as children are active and happy, even in absence
of  specific rewards. Even though people
are motivated by intrinsic rewards organizations need to develop supportive
conditions so that they can provide these kind to rewards. Findings of SDT
reveal that environments that support autonomy and competence have more
satisfied people versus environments that are controlling and only motivate
people by “extrinsic rewards” (Deci and Ryan, 1985). SDT theory also examines
factors that enhance intrinsic motivation, the theory guides towards three
types of psychological needs namely competence, autonomy and relatedness-“which
when satisfied yield enhanced self-motivation and mental health and when
thwarted lead to diminished motivation and well-being” (Deci
and Ryan,1985 pp 68).


(Herzberg’s, 1976) explains two
factors in his hygiene- motivation theory of job satisfaction, factors that
cause job satisfaction and factors that cause job dissatisfaction. According to
(Herzberg ,1976), motivation comes from within and cannot be generated by
outside factors like reducing time at work, high salaries, fringe benefits, these
fail to generate motivation amongst employees. According to (Herzberg, 1976)
factors that are involved in producing job satisfaction and motivation are
different from factors that lead to job dissatisfaction. Factors also termed as
“motivators” that motivate people in their jobs like achievement, recognition
for achievement, responsibility and progress, these factors are intrinsic in
nature. Factors also termed as “hygiene” factors like salary, bonus, promotion,
status, security, working conditions are more extrinsic in nature. As per (Herzberg’s,
1976) research the “motivators” were the primary cause of satisfaction and
“hygiene” factors were primary cause of dissatisfaction in jobs.

On basis of
Herzberg theory (1976) and SDT theory (Deci and Ryan,1985) a hypothesis is
formulated to understand and predict which rewards intrinsic or extrinsi  motivate employees.

   Hypothesis: “ASML
employees are more motivated by intrinsic rewards than extrinsic rewards”

The method

A Likert2
type of questionnaire (provided in appendix 2) was used which had scales
ranging from 1 to 5 ; 1= strongly disagree, 2= disagree, 3= neutral, 4= agree
and 5= strongly agree. Random employees working in different departments like
quality, design & engineering, marketing, supply chain were handed over the
questionnaire personally. The purpose of the questionnaire was explained to
employees it was also mentioned that they will remain anonymous.

To check the
reliability or internal consistency of questions in the questionnaire Cronbach’s
alpha reliability scale is used, alpha originally developed by Lee Cronbach is
used to provide a measure of internal consistency of a scale. It is important
to determine internal consistency of a questionnaire so that results obtained
are valid and measurement error is reduced (Tavakol and Dennick, 2011).
Cronbach alpha values between 0.6 to 0.7 and above are assumed to indicate a
good level of consistency (Newton,2014). The questionnaire reliability test was
done in Minitab3 using
multivariate item analysis. Index related to intrinsic, extrinsic satisfaction
is given below in table 1

1 Self-Determination Theory

2 The scale is named after its inventor Rensis Likert.
This scale is used to measure attitudes or opinions of respondents.

3 Stastical Software tool used to analyse data