Analysis of motivational factors in a not-for-profit organisation

This paper is a contribution to effective remuneration policy in the third sector. The essential issue of the paper is an understanding of the influence of intrinsic and extrinsic rewards on the motivation of not-for-profit staff. The paper reports on a study, using discriminant analysis, undertaken in an organisation providing services for people with disabilities, and which is facing a changing funding model. The organisation is made up of two units, in one of which employees can earn a performance bonus. This situation allows for a clear assessment of how extrinsic rewards are perceived by staff as a source of motivation. The important findings of the study are that remuneration policy in the third sector should take account of the fact that intrinsic rewards play a significant role in motivation. Extrinsic rewards do motivate staff, but in combination with intrinsic rewards.