Motivation of Multinational Employees in Small Business Enterprises (SMEs) with Implementation of Saudization


Motivationof Multinational Employees in Small Business Enterprises (SMEs) withImplementation of Saudization




Abstract 5


Introduction 6

Research Overview 7

Background to the topic 8

Significance of the Study 12

Research Questions 13

Research Objectives 13

Research Synopsis 14


Introduction 16

Theoretical Literature Review 16

The matching strategic HRM model 16

The Reinforcement Theory of Motivation 18

The Equity Theory of Motivation (ETM) 20

Expectation Theory of Motivation 21

The Goal Setting Theory (GST) 22

Maslow’s Theory 23

The ERG Theory 25

Herzberg’s Theory of Motivation and Hygiene 27

Empirical Literature Review 28

Motivation 29

Importance of employee motivation 29

Factors in Employee Motivation 30

Organizational Factors 31

Group Factors 34

Individual Factors 36

Responsibility over Motivation 36

Research Conceptual Framework 37

Research Hypotheses 40


Introduction 41

Research Design 41

Role of the researcher 42

Unit of Analysis 43

Respondents of the study 43

Research Strategy 44

Sampling 44

Data and Data Collection Instruments 45

Missing Data 46

Data Analysis 47

Validity and reliability 49

Rigor 50


Introduction 52

Outcomes of the Survey 52

Table 1.0: Results of the Survey (Responses from the questionnaires) 54

Table 2.0: Manager Responses 56


Introduction 57

Organizational Factors 57

Group Factors 57

Individual Factors 58

Employee Motivation vis-à-vis Saudization 58


Introduction 60

Relating outcomes to the Research Objectives 60

Limitations of the study 61

Future Research 62

Concluding Remarks 62

References 63

Appendix 1: Demographic Characteristics of Respondents 68

Appendix 2: Outcomes for table 2.0 STATA 12. 69

Appendix 3: Standard Deviations (Table 2.0) 70

Appendix 4: Questionnaire. 71


Thisdissertation sought to ascertain the motivational factors ofmultinational employees in the SMEs in Saudi Arabia in the context ofSaudization. This was founded on the perceived negative externalitiesof the policy especially in the Saudi private sector, which over timehas attracted research attention. This dissertation, however,deviated from the universality of coverage in the previous works andsought to establish how motivation of multinational employees, ratherthan employees in general, can be motivated in the context of theSaudization policy. To this end, qualitative techniques were used toexamine the perceptions of the expatriate workers concerning whatmotivated them especially with the implementation of Saudization inthe private sector. A sample of 128 respondents, 100 employees and 28managers were interviewed and the results showed that organizationalfactors, group factors and individual factors were all significant inemployee motivation. However, the outcomes herein should beinterpreted with caution because all this factors were significanthaving controlled for equality and discrimination, which were singledout, be the respondents as being the main channels through whichSaudization impacts on work force motivation.

KeyWords: Saudization, Motivation, Expatriate, Nationals


Unemploymentis one of the biggest socio-economic problems that the countries inthe Arab region have had to address in the past few years. This is acritical challenge that the respective governments have beenconfronted with at a time when the unemployed youth account foralmost half the population. The gulf region and the north of Africacollectively referred to as MENA (Middle East and North Africa) havebeen found to have 28.3% and 23.7% rates of youth unemploymentrespectively which according to ILO (2003), were the highest in theworld. The gulf region was also found to have registered the highestgrowth rate of labor force in the world even surpassing the Africansubcontinent (sub-Saharan Africa) and other regions of the developingworld (Saif &amp Abdul, 2011, p.211). These findings required therespective governments in the gulf region and the Arab world to comeup with policies to secure employment opportunities for theircitizens.

Generally,the gulf region, to which Saudi Arabia belongs, has had a poorperformance in the areas of human capital. The rates of unemploymentin the region has been found to correlate negatively with the incomeper capita level in which high income countries have been found tohave low levels of unemployment as compared to the low-incomecountries. Saudi Arabia, which is then focus of this paper, however,isthe only high-income country in the region which exhibits a high rateof unemployment (UNDP, 2009) Following this outcomes, the Saudigovernment introduced a strategic policy referred to as Saudizationso as to impose a ceiling on the expatriate employment levels in theprivate sector so as to secure employment opportunities for thenationals. The SMEs in the private sector were the most affected bythe Saudization policy (Asad&amp Henderson, 2011, p.411).This policy was particularly found suitable by the policy makers inSaudi since it was found that the Saudi economy had so many foreignworkers especially in the private sector. The Saudization policy wasdesigned to cut the number of foreigners employed in the economythrough enforceability in a regime that introduced structuralbottlenecks for obtaining Saudi work permits while simultaneouslyfacilitating training programs for the Saudi nationals. However, thispolicy of Saudization has attracted research attention for having notonly failed to achieve its overriding objective (reducing the numberof expatriate employees) but has also introduced challenges for thevarious dimensions that revolve around human resource management likeemployee motivation and other hazards likened to affirmative action.This chapter examines how the human resource management practiceshave changed in Saudi Arabia and the macro-context within which itoperates (Saudization policy). The chapter looks at the keychallenges facing decision-makers and human resource (HR) managers inSaudi Arabia with respect to employee motivation in the context ofSaudization.


Overtime, researchers have been preoccupied with finding the best way tomotivate employees in an organizational context. Some of the beststrategic human resource practices as espoused by research effortshave been tested and to this end, some endemic problems towards workforce motivation have been solved. However, the ever-dynamiccorporate world is replete with challenges and finding anorganizational solution to the work force motivation problem that canstand the test of time and absorb external shocks affecting thediscipline has occupied the endeavors of researchers in the moderntimes. Policy makers and practitioners in the HRM discipline havebeen preoccupied with finding solutions to the problems that inhibitthe human resource practice in the private sector in the context ofradical government policies.

Backgroundto the topic

Thissection establishes the historical grounding of this paper byexploring the various reasons that necessitated the policy ofSaudization as was effected by the Saudi government. In so doing, thepaper seeks to espouse how this policy came into being with anoverriding aim of ascertaining the dynamics that it occasioned in thehuman resource management in Saudi especially in the private sector,which includes several multinational employees in the Small andMedium Enterprises (SMEs). The primary preoccupation is in thedimension of work force motivation in these enterprises.

TheSaudization policy introduced in Saudi Arabia, and which is a keyvariable in this study, is not a completely new phenomenon. Thepolicy has been widely applicable in contemporary management where ithas been referred to as ‘job domestication’ and in some quartersas ‘job localization’ (Daher &amp Al-Salem, 1985, p.82: Cateora&amp Graham, 2007, p.221). The phenomenon has also been widelystudied in endeavors that involve the acculturation interventionsthat involve working in foreign countries (Saad &amp Fadeel, 1983,p.91). Existing body of literature has shown that the privateentities in the gulf region have over time shown preference forforeign workers (Al-Dosary &amp Rahman, 2005, p.234) and thisexplains why the private sector in Saudi was bloated with foreignworkers thus a rationale for Saudization. In the past few years, theSaudization program has not only attracted research attention but hasalso attracted the attention of policy makers in the Gulf CooperationCouncil (GCC), which comprise countries that are equally bloated withexpatriate workers. The decline in oil prices in the eightiesmanifested the risks of relying on oil as the major source of revenueand there arose a need for diversification in Saudi economy.Additionally, policy makers in Saudi also realized that theoutrageous foreign remittances by expatriates in billions of dollarsdid greatly affect the economy of Saudi.

Thereliance on expatriate labor in Saudi Arabia and the gulf region ingeneral is said to have grown boldly following the October 1973 war,which led to a big rise in oil prices in the world market. Thisincrease in oil prices translated to increased national incomes forthe oil exporting countries in the gulf region, which included SaudiArabia. This increased income led to an increase in economicactivities and projects. The Saudi government, in particular,undertook large infrastructure projects, large-scale construction andindustrial processes. A majority of this projects attractedinternational companies, MNEs as well as other non-governmentalorganizations in the form of small and medium enterprises (SMEs). Thespiral effect of these activities and projects was that the number ofexpatriates (read multinational employees) rose rapidly as theeconomy required them to undertake productive work in the largepublic projects. Moreover, the proceeds from these projects as wellas the high income from oil were converted into welfare packages forthe Saudi nationals giving rise to a stratum of well-paid yetunproductive employment for the nationals. The renewed economicgrowth due to proceeds led to the creation of the ‘dual labormarkets’ and ‘dual societies’ as there emerged a form ofsupremacy between the nationals and expatriates and this structuredthe nature of the citizen’ allegiance to their political leaders.More aptly, the benefits accruing to nationals could even beaugmented based on the extent of distinction between the nationalsand non-nationals. The distribution of labor in the private sectorhas become uneven in the country over time as shown in figure 1.0below. The non-Saudi employees are found to have bloated the buildingand construction industry followed by wholesale and retail ventures.

Figure1.0:Distribution of Employment in the labor sector.

Source:Ministry of Labor Report, 2008

ThatSaudization further complicated the already underestimated concept ofworkforce motivation has always been open to discussion. Majority ofscholars have always questioned the very necessity of Saudization buteven so it has always been important to conceive the variousperspectives from which this rational is presented. It has alwaysbeen advanced that the sharp increase in the national incomes fromoil in the 1970s led to an economic growth rate in Saudi Arabia,which could not be matched, with a similar growth rate of skilledlabor force. This created a place for foreign labor not only as asufficient but also as a necessary condition for a sustaineddevelopment (Al-Wakeel, 2001, p.189). Moreover, until 1984,“graduates from higher institutions of learning in Saudi were notallowed to work in the private sector but were forced to work in thepublic sector to enable the government recoup the resources it hadinvested in their training” (Maimani, 1989, p.122). This is apolicy that derived the private sector of the much-required skilledlabor from the Saudi nationals and had to opt for qualifiedexpatriates to fill the niche (Al-Ali, 1997, p.87). However, thegovernment of Saudi was overwhelmed with providing jobs for the Saudigraduates and began directing them to the private sector, which wasalready full of low-paid expatriates (Alzalabani, 2004, p.147.). Itis at this point in time that the government initiated Saudization inorder to create employment for the graduates.

Traditionally,the policy in Saudi Arabia was to the effect that every citizen hadan entitlement to a specific number of work visas, a number thatoften varied among citizens depending on their socio-political class.The original intention was to allow the kafeelto import labor that they would themselves sponsor. However, thekafeelbecame economic agents who relied on the importation of labor to earna living. The effect is that in the end, the number of imported laborthrough this channel had grown substantially. However, the humanresource management in Saudi Arabia in particular is also influencedby a host of other political factors. The members of the corporateclass for instance have their own view regarding the supply of labor.This class possesses a social and political front that checksgovernment interventions in the regulation of human resourcemanagement. The social elite, which has been supporting thegovernment having emerged during the oil boom years of the early1970s has always combined forces with the strong business class whichemerged through the allocation of lucrative government tenders tocronies of the ruling elite operating from the Saudi Chambers ofCommerce to vehemently put opposition to labor reforms in theeconomy.

Theissues surrounding workforce motivation and similar dimensions ofhuman resources in Saudi today are not new. Scholars had longobserved that Saudi, just like other states in the Gulf region, is a‘rentier state’ in the sense that the allocation of resources andother economic incentives are undertaken along certain politicalpatronage lines. The ultimate effect of this form of an economicsystem is that it suffocates the confidence-based and predictablebusiness thereby making long term planning difficult. Thisunpredictability makes private businesses and other MNEs to ‘underemploy’ expatriates for fear of drastic shifts in the labor supplypolicies. In such a scenario, even those who are employed are notwell remunerated and the MNEs and SMEs find it difficult to invest inthem for long-term purposes: thus lack of motivation.

Alook at the events that characterized the post Saudization as well asthe period after its implementation in Saudi reveals that theSaudization program was a spiral effect of a sharp economic growththat superseded the growth of the required human capital. Thisnecessitated the need to import skilled labor to facilitate the majordevelopment projects initiated courtesy of the increased nationalincome. The inflow of foreign labor coupled with other governmentpolicies led to a private sector bloated with expatriate workers at atime when Saudi had the highest rate of (youth) unemployment (Saif &ampAbdul, 2011, p.211). This necessitated the Saudi government toimplement a policy, Saudization, to set a ceiling on the level ofexpatriate employees in the foreign sector while at the same timefacilitating the training of Saudi youth. This had severalimplications for corporate practices in the private sector, asituation that has always called for a delicate balance betweencompliance and augmenting human resource in the private sector. Inline with the aim of this paper, a lot of emphasis is laid on theissues that impinge on motivation of multinational employees in theSaudi private sector.

Significanceof the Study

Thisstudy is unique in the sense that it is the first of its kind that isseeks to study the motivation of multinational employees of SMEs inthe context of Saudization. By considering the human resourcepractices in KSA, the study seeks to explore the extent to which itis possible to undertake employee motivation in SMEs in an economywhere there is a ceiling for hiring foreigners. The study comes inthe backdrop of certain issues that are unique to the labor market ofKSA. Scholars have always investigated and realized that humanresource practice in Saudi is particularly tricky especially whenthere is no minimum wage in Saudi (Al-Hassani, 2004, p.198). Forinstance, in the year 2000, it was observed that the citizen workersin Saudi earned almost three times the expatriates (p. 201). There isan established consensus that the Saudi nationals earn much more thantheir expatriate counterparts only that the margin in the incomesvaried from one sector to another (Telhami and Hill, 2002, p.67).

Theproblem surrounding motivation of employees in the private sector isnot only an economic concern. It is multifaceted as it is complex.The Saudi political tapestry goes over and above providing thestructures along which human resource management practices areundertaken to directly influence certain crucial aspects of humanresource management in the country. Contrary to many states, SaudiArabia is an absolute monarch ruled by a king who is both the head ofgovernment and state. Despite several policy-based interventions tomanage the economy and by extension human resource practices,individualized and idiosyncratic variables anchored on informalcustoms have always prevailed, in most circumstances distorting theeconomy. In this scenario, there is no space for trade unions tocheck policy regulations instituted by the government and championthe plight of workers.

Therefrom,studying the motivation of employees in the private sector, amajority of whom are employed in the MNEs and SMEs in Saudi willgenerate invaluable insights into the exact challenges faced at thefirm level in trying to comply with the Saudization policies and atthe same time undertaking employee motivation. Given that theSaudization program has not satisfactorily achieved its intendedobjectives since it was rolled out, the outcomes from this paperwould be crucial for the Saudi authorities on how to implement thesystem in such a way that it achieves it is implemented withoutfurther distortions to human resource management.


Thefollowing research questions were developed in this dissertation toaccomplish these aims:

  1. How do managers motivate multinational employees in SME in light of the enforced Saudization law?

  2. How can managers enhance workforce motivation in SME in light of the enforced Saudization law?

  3. What is the other facet of human resource management that has been greatly inhibited by Saudization?

  4. What is the overall impact of Saudization on the Human Resource Management?


Theoverriding objective of this paper is toassess the impact of the implementation of the Saudizationregulations on the aspects of employee motivation in the SmallBusiness Enterprises (SMEs) in Saudi Arabia. The other objectivesare:

  1. To find out how managers influence the morale of employees in the SMEs.

  2. To ascertain the overall impact of Saudization of the Human Resource Management in the SMEs in Saudi Arabia.

  3. To establish the various mechanisms used to motivate multinational staff in the private sector.


Thisdissertation is designed to ascertain the extent to which employeesin SMEs in Saudi can be motivated in the context of Saudization. In abusiness environment characterized by stringent regulations that setsa ceiling on the level of foreign labor and wages, it is expectedthat human resource management challenges abound such a policy.Therest of this dissertation is organized as follows:


Thischapter reviews relevant literature on Saudization, Saudi privatesector, MNEs and work force motivation. This section of the paperwill undertake to review some theories of motivation as well as theempirical outcomes of similar studies with a view to establishing theresearch niche that this paper seeks to address. In the empiricalsection of this chapter, studies touching on issues such asemployee-employer relationship and the work place environment will bereviewed.


Thischapter prescribes the methodology of the study. In thisdissertation, qualitative techniques of data collection will beemployed sincemost psychological researchers over time that human values andattributes can be measured objectively using qualitative techniques(Robson, 2007).


Thischapter presents the outcomes of the study as obtained from applyingthe methodology prescribed in chapter three. It presents the generaloutcomes of the study as well as some problems encountered in theprocess of data analysis.


Chapterfive presents the discussion of the results presented in thepreceding section (chapter four) and reconciles the theoreticalprescriptions in chapter two with the outcomes of chapter four.


Thisis the final section of the dissertation, which synthesizes theimplications of the research findings and relates them to theultimate objective of the paper. In prescribing the applicability ofthe findings of this dissertation, this section does present theintervening factors that need to be taken into account especiallywith the controls applied to obtain the results herein. The scope ofthe paper is reflected by prescribing a niche for future research inthis discipline.


Thischapter assesses the relevant literature on Saudization (also ‘joblocalization’ or ‘job domestication’ as referred to in somestudies), its influences on human resource management and SME workforce motivation practices in Saudi Arabia. This section is dividedinto two parts: Theoretical Review and Empirical Review.

TheoreticalLiterature Review

Thissection of the paper analyses theories of human resource managementthat address aspects of employee motivation. In this endeavor, anarray of theories will be reviewed. The applicability of the varioustheories of motivation to the motivation of employees by the MNEs andSMEs in Saudi with respect to the policy of Saudization has also beenassessed.

Thematching strategic HRM model

Thisis an influential model of has gained wide applicability for itscomprehensive approach in strategic human resource management whichstructures HR in organizations to absorb external shocks. The modelis premised on a proposition that high-income countries can gaincompetency in human resource management by adopting a differentiationstrategy proposed by Michael Porter in 1980. This strategy isworker-oriented as it is anchored on the ‘required behavioral role’to establish a required, predictable structure of behavior (Cappelliand Singh, 1992, p.434). This model is particularly significant tothe endeavor of this paper because it, as a model of strategic humanresource management, is concerned with the task of ‘matching’theory and the five Ps (programs, practices, processes. philosophyand policies) in such a way that the employee will be stimulated towork even harder i.e. undertake a reinforced activity which willtrigger a peculiar behavior that enhances the competitive strategy ofan organization (Schuler, 1989. p.146).In the context of Saudization,one of the five Ps, policies can be substituted for Saudizationpolicy and the role of the management would be defined by how tomerge the external policy (Saudization) with the other four Ps toenhance employee motivation for their own strategic advantages. Incases where there are drastic changes in the external policy frameworks relating to human resource management, an organization’spractices should be structured in such a way that its fundamentaltenets are aligned to the external policy frameworks (Miles &ampSnow, 1984, p.232)

Therehave been arguments regarding the efficacy of the matching strategichuman resource management model as regards its applicability in theface of drastic changes in the external labor environment. Fombrun etal (1984, p.37) while undertaking a critical review of the matchingHRM model, observed that the human resource systems in organizationsshould be structured in such a way that it is aligned to the corecompetencies of businesses as much as it is adaptable enough toabsorb dynamics in the corporate world. These findings are similar tothose of Chandler (1962, p.297) which espoused that adaptability inhuman resource management is critical to match external policies withthe internal HRM practices especially for businesses operating indynamic labor markets. Moreover, the matching HRM model proposes thatthe HR systems of businesses should be organized in such a way thatthe system impinges on the aspects of its constituent parts based onthe environmental impacts in which the business operates (Boxall,1992, p.93). The concept of a ‘fit’ between the external businessenvironment and the internal human resource practices is the centralproposition of the matching HRM model in the sense that the essenceof any business HRM wing is to ensure that the external changes inpolicies (read Saudization) should not have any serious long negativeexternalities on the internal HRM practices (read motivation) of theorganization (Schuler, 1989, p. 164: Beer et al, 1984, p. 13).

Essentially,in the context of Saudization, this model proposes that it ispossible to sustain the human resource practices like employeemotivation in organizations even with the implementation of thepolicy since the HR wings of the SMEs ought to be structured toabsorb external shocks in the labor sector. However, the model doesnot set the scope for the nature of external shocks thatorganizations can absorb. Saudization is a radical policy that cantransform the fundamental groundings of HRM structures especially ina country with no labor unions. In this context, the matching HRMmodel is sound and applicable, albeit with reservations.

TheReinforcement Theory of Motivation

TheReinforcement theory of motivation was initially developed by B.F.Skinner and basically proposes that motivation is determined by theconsequences of individual behavior. Essentially, this theory ofmotivation proposes that a behavior, which results to desiredoutcomes, will tend to be repeated by individuals while those actionsthat result in undesirable outcomes will be avoided. This theoryfunctions by ignoring the internal states like the mentalpredisposition of individuals who engage in various actions that maybe repeated or otherwise avoided and instead the theory has as itsprimary predisposition the consequences of individual actions. Thetheory is not concerned with the internal drive or what causes anindividual to engage in a particular action. According to B. F.Skinner, human motivation is derived from the external environmentand therefore, in order to motivate an employee, the externalenvironment of an organization has to be deliberately designed in afashion that serves to appeal to the employees.

Thistheory is particularly important to the endeavor of this studybecause it has been found to be a strong instrument for regulatingmechanisms of human behavior as much as it does not pay any attentionto the underlying causes of human behavior. Moreover, the theoryprescribes specific strategies that can be employed by businesses tomotivate employees based on the different circumstances and generalorganizational goals. The theory proposes different reinforcementmechanisms such as positiveand negative reinforcement, punishment and extinction.In positive reinforcement, organizations respond positively whenemployees exhibit positive, desirable or required behavior. Theunderlying idea behind positive reinforcement is that it serves toenhance the chances of the exemplary behavior being repeated. Forinstance, an employee may be rewarded for doing an outstanding work.In this case, the reward has only a spontaneous effect, the greatervalue is the reinforcement mechanism it institutes. Negativereinforcement works in the reverse mechanism to achieve similarobjectives. In negative reinforcement, employees are rewarded forhaving avoided an undesirable action. Both mechanisms can be employedby business organizations to uphold desired employee conduct.

Anotherimportant mechanism of the reinforcement theory is motivation throughpunishment. In this, employees who exhibit undesirable actions aresubjected to undesirable consequences to reduce their probability ofrepeating the undesirable action. Finally, extinction is yet anotherimportant mechanism of this model in which a certain kind of behaviormanifested by employees is suppressed by withdrawing hitherto rewardsto tithe reinforcement theory of motivation is thus widely applicablein organizations for its numerous mechanisms of employee motivation.In the SMEs in KSA, this theory can be conveniently applied inemployee motivation since it is anchored on individual performanceand may not be impaired by whether one is an expatriate or anational.

TheEquity Theory of Motivation (ETM)

Thistheory of employee motivation is based on the principles of equity.According to the Equity Motivation Theory, employees’ extents ofmotivation are directly related to their perception of the principlesof equity and fairness as practiced in the organization. Basically, ahigher perception of fairness in an organization by employees resultsto a higher degree of motivation. The reasoning behind this keyproposition of the model is that in the process of evaluating equityin an organization, an employee will establish a ratio by relatingthe work input to the outcomes often in terms of remuneration andultimately compare the results to those of colleagues. It is proposedthat equity is usually perceived if the ratios tally. However, theratios do not tally, a situation technically referred to as anegativetension rate,equity in an organization will not be perceived by the employees.According to this model, an employee can make four such comparisonsreferred to as referents.The first comparison is referred to as self-insidein which encompasses an employee’s setting in a different positionwithin his organization while self-outsideis the reverse of self-inside. The other referents are other-insideand other-outside,which relate to placing other employees in others’ contexts.

Thetheory primarily advocates for utmost equity in the strategicmanagement practices of organizations as a means of achievingemployee motivation. The MNEs in Saudi, which have been greatlyaffected by the Saudization policy, should ensure that the principlesof equity are met in the organizations to motivate their workforce.However, the application of this theory of employee motivation issubject to certain assumptions. The first assumption is thatemployees pay much attention to their rewards just as they do tothose of their peers, otherwise, the theory lacks in grounding. Thetheory is also based on the premise that employees consider equity tobe a key factor governing employer-employee relationship and thatthey decide their optimum pay only after making certain comparisons.

ExpectationTheory of Motivation

TheExpectation Theory of Employee motivation was developed by VictorVroom in 1964. This theory is primarily preoccupied with outcomesunlike the Herzberg’s or the Maslow’s theories that are concernedwith needs. This model proposes that the probability of a behavior tobe replicated relies on the degree of expectation that a desirableoutcome preceding the immediate one will be achieved. More aptly, ifindividuals harbor great expectation concerning a particular kind ofoutcome, then they are likely to pursue a particular kind of action.The model proposes that the degree to which employees will bemotivated depends on their degree of commitment to get a reward i.e.valence.Moreover, the level of motivation depends on two other factors: theperception that the efforts applied will result in the expectedoutcomes i.e. expectancyand the individual mentality that the effort will yield the expectedoutcome i.e. instrumentality.In this, the valence is the expected rather than the real reward thatan employee expects to get in pursuing certain goals and expectancyis more of a faith that the input will yield expected outcomes. It isimportant to note that in this framework, expectancy is affected byother intervening factors such as availability of resources andnecessary skills to accomplish tasks. Nevertheless, instrumentalityis a belief that if the performance is good, then the goal will beachieved.

Havingassessed the three constructs of the expectation theory ofmotivation, it can be concluded that the theory is based on threekinds of relationships. First, the theory stresses on theEffort-performance nexus in which the key concern is whether theindividual performance of an employee will feature in their jobevaluation. More aptly, the theory finds important that if employeesare likely to be recognized for certain efforts, then they are likelyto pursue those effort-oriented goals. Second, the theory analyzesthe performance-reward nexus in which an employee is keen on therewards offered for a specific goal having been achieved. Finally,the theory does examine the rewards-individual goals nexus where thesignificance of the reward to individual ambitions is evaluated. Theimplication of this theory is that the performance by employees issolely determined by themselves having considered the above listedfactors, which ultimately trigger their motivation. The factorsemployees take into consideration are valence, instrumentality andexpectancy.

TheMNEs in Saudi can employ this theory in employee motivation byidentifying individual career aspirations and tailoring the rewardstowards these aspirations. According to the theory, the employeeswill be motivated to work for the ultimate value that the reward willhave on their long-term career ambitions. This theory is advantageousin the sense that it is anchored on the individual aspirations ofemployees to perform and emphasizes on the value of rewards, whichhave been found to be one of the surest ways to motivate an employee(Rainlall, 2004, p.24). The theory should however be applied withreservations since only a few individuals are keen on theperformance-reward nexus (Kim, 2006, p.39).

TheGoal Setting Theory (GST)

Thistheory was developed by Edwin Locke in 1968. The theory espouses thatthe setting of goals in organizations is correlated to the employeeperformance. Further, the theory posits that specific and challengingobjectives complete with a feedback mechanism instituted byorganizations usually lead to better outcomes courtesy of employeemotivation. The essence of this model is that organizational aims andobjectives (or simply goals) give bearing to the employees not onlyconcerning what is to be done but also based on what is to beachieved. This, according to the theory, signals to the employees theamount of effort they need to put in to accomplish the tasks. Thistheory is based on a few critical fundamental tenets: First, itappeals to the willingness to work as the major drive of employeemotivation. In this, specific and challenging tasks are espoused asvital in occasioning greater employee motivation. The set goalsshould be attainable as much as they should be challenging. The ideais that when employees accomplish hitherto challenging tasks, theyusually have a certain degree of confidence and pride, which serve toprepare them for their next task. This is something everyorganization would want to impart in their employees. Finally, thegoal setting theory recognizes the significance of feedback ofoutcomes to employees as important in building employee reputationand leads to job satisfaction on the parts of the employee. Thistheory is based on the assumptions of self-sufficiency andgoal-commitment. By self-sufficiency, the theory assumes that theemployee has confidence and the required ability to accomplish thetask. Goal-commitment implies that the employee will not forsake theset goal.

TheGoal Setting Theory can be applied to the situation of the SMEs inSaudi since the organizations only need to set realistic andchallenging goals for their employees as a way of motivating them.The SMEs should also ensure that hey structure a certain feedbackmechanism to convey outcomes of employee efforts to encourage jobsatisfaction amongst the employees. The application of this theoryhas a key advantage to the organization, which also serves to benefitthe employee. Goal setting theory enhances the employee incentive tocomplete the work quickly and effectively while at the same timeaugmenting employee confidence and competencies. However, if thegoals set are difficult or even unattainable, the employees arelikely to exhibit counterproductive behavior. Moreover, there arelikely to be cases in which the goals set by the organization ingeneral conflict strategic management goals.


Thistheory was originally proposed by Abraham Maslow in 1943, as theHierarchy of Needs. Different from the theories discussed above, thisis a classical theory depicting the essence of human motivation. Theoverriding assumption of this theory is that there exist five needsthat are universal for all human beings and what’s more is that theurgency of these needs vary from one individual to the other. Theneeds are: physiological needs, safety needs, social needs, esteemneeds and finally, self-actualization. Physiological needs refer tothe basic needs that are required for human survival. These include,water, air, shelter, clothing and food. By safety needs, it isimplied emotional safety, physical and environmental safety. Morespecifically, this stratum encompasses job security, family securityand even financial security. Social needs refer to the needs relatingto affection and love, friendship and a sense of belonging. Esteemrefers to the needs for achievement, freedom, competence as well asneed for power, recognition and admiration amongst peers. Finally,self-actualization is the ultimate human need in which theindividualsdesire to become their ideals. This need encompasses theneed for self-contentment and knowledge, creativity and aesthetic.Figure 1.0 below shows the Maslow’s Hierarchy of Needs.

Figure1.0:Maslow’s Hierarchy of needs

Accordingto this theory, employees are usually motivated by the unsatisfiedneeds. Moreover, once a need is satisfied, a drive is created for thenext need in the hierarchy to be achieved. The theory furthercategorized the five needs into two groups: the Higher-order stratum(self-actualization, esteem needs and social needs) and theLower-order stratum (physiological and safety needs). It is espousedthat the Higher-order needs are usually satisfied internally andrightly so, it can be established that employees usually accomplishtheir lower stratum requirements during periods of economicprosperity.

Thistheory is largely applicable in the corporate platform for itsbinding implications. The MNEs operating in the private sector inSaudi can implement the implications of the Maslow’s Theory ofNeeds in a variety of ways. The essence of the physiological needs tothe businesses is that they ought to provide the employees withadequate remuneration to enable them obtain the necessities of life.On a lighter but vital scale, the work schedules should be designedto allow breaks for employees to eat and freshen up. Businesses alsoneed to respond to safety needs by providing retirement packages toemployees, providing physical security and ensuring high standards ofhygiene at the work place. For social needs, organizations ought toplan for outdoor activities and team building escapades for theworkers. Appreciating exemplary performances from employees andgiving them challenging tasks would ensure esteem need andself-actualization for the employees. The greatest challenge inimplementing this model at the work place is that individuals arealways at different levels of the hierarchy providing personalizedneeds is almost unrealistic.

TheERG Theory

Thistheory is augmented from Maslow’s theory of needs and was developedby Clayton Anderfer who reclassified the five needs in AbrahamMaslow’s hierarchy of needs into three broader categories: thegrowth needs, relatedness needs and existence needs. In this newclassification, existence needs encompass the necessities of life.Generally, this classification covers the physiological and safetyneeds in the Maslow’s hierarchy of needs. The Relatedness needsinclude the social needs in the Maslow’s model as well as theexternal aspects of esteem requirements. Growth needs encompass thedesire for individual growth and development. It is the ultimate needin the ERG model of motivation and resembles every aspect of theself-actualization need in Maslow’s Hierarchy of needs only that itis broadened to include the internal states of self-esteem needs.Despite these characteristic differences between the ERG theory ofmotivation and Maslow’s theory of needs, the two approaches differin a variety of ways. Contrary to the Maslow’s theory of needs,this theory proposes that if an individual is not in a position tosatisfy a higher-level need, there emerges a renewed desire tosatisfy a lower level need.

Additionally,the Existence Relatedness Growth (ERG) Theory, posits that if anindividual is incapable of meeting a higher-order, need, the primalenergy is diverted towards the fulfillment if an immediatelower-order need, what is technically referred to as thefrustration-regression concept of the ERG theory. Moreover, the ERGtheory is not very stringent on the order in which the fulfillment ofneeds is achieved, in this revised model of Maslow’s hierarchy ofneeds, a higher-order need can be satisfied even if some lower-orderneeds were not met. This contradicts the principles of Maslow’shierarchy of needs.

TheERG theory has gained applicability in the corporate world byproviding insights to the extent that individuals might be faced withmultiple needs at any one time. According to the ERG theory, in orderto motivate employees, it is necessary for organizations to focus onmultiple need satisfaction strategies rather than adopting piecemealkind of approaches. However, the frustration-regression aspect of theERG has added a new dimension as far as employee motivation isconcerned. The implication of this concept is that if an organizationdoes not facilitate the attainment of higher-level needs, employeesmay as well revert to satisfying the lower-order needs. In thisrespect, it is possible that organizations may deliberately denyemployees higher order needs if the organization feels that employeesshould be motivated to achieve the lower order needs. The applicationof the theory however requires caution since the organizations musttime the employee actions to ensure that the need they occasion isrightly being pursued by the employee at that very time.

Herzberg’sTheory of Motivation and Hygiene

Thistheory was developed by Fredrick Herzberg in 1959. According to thetheory, some job factors lead to satisfaction while others preventdissatisfaction. In this theory, either a factor results in‘satisfaction’ or ‘no satisfaction’ or rather in‘dissatisfaction’ or no ‘dissatisfaction’. This theorydichotomizes job factors into two groups namely, the hygienefactorsand the motivationfactors.Hygiene factors refer to those job factors that are necessary formotivation in organizations. The idea proposed here is that if thesefactors do not exist in business organizations, then they lead toemployee job dissatisfaction. These factors often denote thephysiological requirements that individuals looked up to theorganization to provide with the expectation that they would be madeavailable. Hygiene factors include status within the organizationstructure, fringe benefits, organization policies, remuneration andjob security.

Motivationalfactors, on the other hand, refer to the factors that are intrinsicto work and therefore motivate employees to produce exceptionalperformance. The motivational factors are involved directly inundertaking assigned roles by employees at work. The major aspect ofthese factors from the hygiene factors is that the motivationalfactors are intrinsically rewarding to employees. The motivationalfactors include sense of achievement, recognition, sense of triumphand responsibility. The motivational factors are usually the mostrewarding and ensures a sustained performance at work in the even atthe expense of fancied work-related extrinsic desires (Kim, 2006,p.46). This theory can be applied to an organizational setting byencouraging a culture of intrinsic employee motivation. This can beachieved by first ensuring that there is are basic motivationalfactors within the organization such as fringe benefits andappropriate remuneration packages. The application of this theoryhowever could have several detrimental effects if it is notcautiously implemented owing to the several demerits that it has. Thetheory does not consider situational variable and the impacts thatthese phenomenal variables could have on the motivation of employees.Moreover, the theory assumes a direct proportionality relationshipbetween productivity and performance, which is not always the case.Nevertheless, the theory comes across as robust owing to itscategorization of hygiene and motivational factors and theimplications thereof.

Insummary, the theories relating to employee motivation are numerous asthey are diverse. They seem to emphasize that different approacheswork for different organizational and individual settings. Moreover,effective employee motivation seems to require a combination ofapproaches for it to be fully addressed. The theories also espousethat motivation is as much an organization’s role as it is anemployee’s.

EmpiricalLiterature Review

Thissection reviews the outcomes of various researches on the motivationof workers in the MNEs with special attention to studies done inSaudi Arabia and the Gulf region in general. The overriding objectiveis to understand how organizations influence the motivation ofemployees especially in the context of certain external challengeslike Saudization in the case of KSA.


Motivationis a concept that has been defined differently in differentdisciplines of knowledge. With respect to the organizational setting,motivation refers to the general desire or enthusiasm of individuals(read employees) to exhibit a positive attitude and effort concerningtheir work (McKnightet al, 2001, p.122). Contextually, motivation would imply the mentalpredisposition of employees in a variety of organizational settings(Curtis, 2003, p. 67: Lumsden, 1998, p. 477: Bennet &amp Hess, 1996,p. 34). Motivation has also been defined as the degree to which anemployee feels comfortable going about his tasks at the work place(McKnightet al, 2001, p. 467). Motivation has also been conceived as apositive mental predisposition and internal feelings of employees(Stewart, 2004, p. 7). According to Lindner et al (1995, p.233),motivation is a predisposition to act purposively to satisfy certainspecific needs. More aptly, it is an internal force, which drivesemployees to achieve individual and organizational objectives(Lindner, 2004, p. 1). From the various definitions that scholarshave attributed to motivation, there are a few fundamental aspectsthat would be typical of what ought to denote motivation. First, ithas to be internal, it structures human action and it is purposive.Moreover, it can be intrinsically triggered or externally occasioned.

Importanceof employee motivation

Theimportance of employee motivation in the performance of their taskscannot be overestimated. Employee motivation leads to a betterperformance of a business organization as well as intrinsic returnsto the employees themselves. Motivation in employees is said to be astrong human desire and it enables them to perceive themselves asvaluable and exhibit positivity in their organizational achievements(Bruce, 2003, p.27). There has been as much research outcomes thathave had to confirm the significance of employee motivation insituations where the motivation is intrinsic and those in which themotivation is externally triggered. It has been observed that themost productive efforts of employees are realized when they areintrinsically motivated and especially when they need to berecognised for their efforts and build reputation (Nagel&amp Pascarella, 1998, p.566).

Moreover,intrinsic motivation has been particularly found to be important tothe employee and the organizations alike. This kind of motivation isfound to go over and above the performance of assigned tasks byemployees and enables them to work for their well-being and notnecessarily for compensation. For this reason, employees have beenfound to initiate processes for their own motivation thereby sharingin the organization’s ‘burden’ of ensuring employee motivationwhich enables goal-commitment among workers, much to the businessesadvantage (Senge, 1990, p. 104: Rainlall, 2004, p. 25).There is ageneral consensus regarding the existence of themotivation-performance nexus in which it is argued that a motivatedworkforce leads to increased productivity and this is especially soin the long run if employee motivation is complete with a feedbackfrom the management (Lindner, 2004, p. 7). This view has beensupported by the findings of Frey &amp Osterloh (2002) who observedthat motivated employees lead to a reduction in employee turnovers,increases productivity and enhances overall business productivity (p.442).

Factorsin Employee Motivation

Theextensive literature available on employee motivation identifies ahost of factors that influence the employee motivation. The factorsrange from internal to external factors with several otherintervening variables. This kind of complexity in the assessment offactors influencing employee motivation could be attributed to theabstract and subjective concept that motivation is perceived to be(Moynihan &amp Pandey, 2007, 831). This dissertation classifiesthese factors into two broad categories: organizational factors andgroup factors just as was the case in (Hosseini, 2014, p. 718: Lin,2007, 107).


Organizationalfactors refer to the factors, which relate to the organizationalpractices and principles as far as employee motivation is concerned.The human resource management practices of organizations have beenfound to have a vital role towards the motivation of employees. Ithas been ascertained that different employees are motivated bydifferent approaches and there is need for the organizations tounderstand their workforce at a personal level (Rynes et al, 2004, p.390). The overall policies applied by a majority if organizationstowards workforce motivation have been found to be lacking inpersonal appeal (Egan et al, 2004, p. 297) since the workforce isalways diverse on the basis of culture, ability, skills andbackground (Hansen &amp Wernerfelt, 1989, 409). Organizationalfactors, in some literature, are referred to as organizationalculture, which composes organizational rules and policies, companyobjectives, rewards and recognition. The diagram below shows atypical organizational culture.

Figure1.1:Components of the Organizational Culture

Adoptedfrom Serrat (2009)

Thisdissertation will review literature on organizational factorsencompassing organization vision and mission, managerial creativity,work place atmosphere and advancement of employee career aspirations.

Organization’svision and mission

Thecompany missions and vision (or simply organizational objectives)have been found to play an equally important role in the motivationof employees. It has been ascertained that employees usually feelobliged to work towards achieving the set organizational goalsespecially when they are involved in the setting of such objectives(Lawler, 1969, p. 429). The all-inclusive setting of goals andobjectives serves as a motivation of employees as they will becommitted to achieving the set goals and objectives (Nohria et al,2008, p. 78). Researchers have also established that communicatingthe established goals to employees is also an essential element of agoal-oriented motivation towards employees. In fact, anorganizational culture that advocates for an open and effectivecommunication between employees and the management is key tofacilitating employee motivation and therefore should be prioritized(Messmer, 2001, p.). Moreover, Mark &amp Sockel (2001), whileundertaking a confirmatory analysis of employee motivation andretention in the Gulf region, observed that employees usually workbetter and are happier when they are made aware of the company’sdirection (p. 274).


Existingbody of literature is replete with instances in which managers andorganizations in general have been found to have a vital role to playin ensuring that employees are motivated. Jurkiewicz &amp Brown(1998) examined the role of business managements in ensuring employeemotivation and concluded that managers have to ensure that theconstant changes in management practices and external businessenvironment are effected while upholding employee motivation (p. 35).Essentially, the implications of Jurkiewicz &amp Brown (1998) are tothe effect that human resource managers ought to be innovative tofind means and ways to keep employees motivated in the face ofstringent policies like Saudization.It is argued that managers in the respective organizations should berole models by acting in a manner that they would envisage employeesto emulate (Bennet, 2003)

Advancementof employee career aspirations

Thepossibilities of career advancement, when provided by anorganization, have been found to motivate employees. Conducting asurvey on the factor which impinge on employee motivation,Eisenbergeret al (1990) observed that a majority of employees were not very keenon the remuneration offered at the time of the survey but were moreinterested in the long term career growth prospects (p. 51). However,these results were only true for organizations that offered in-jobtraining and other career advancement exposure (p. 52). In yetanother study, it was ascertained that the provision of training anddevelopment opportunities goes over and above motivating them toenable them resume stability in the ever-dynamic corporate world(Scott,2001, p.295).Organizationsthat offer employees challenging and often involving tasks completewith a feedback mechanism are also important in ensure that employeesare motivated especially if the employees view the challenges asopportunities to augment their career aspirations (Rynes et al, 2004,p. 391).

Workplace atmosphere

Theatmosphere in which an employee works as far as the relationshipbetween managers and employees is concerned also comes across thereviewed literature as important in determining levels of employeemotivation. McClelland &amp Burnham (2003) established that managerswield vast influence in the organizational context and therefore candetermine the kind of relationships that exist at the work place.Moreover, the managers have to their discretion the motivationallevel that can result from the powers they hold over employees (p.125). The coercive power, for instance, can be applied appropriatelyby managers to enforce reinforcement mechanisms, which can ultimatelyresult in employee motivation.


Groupfactors refer to other factors that influence employee motivation onthe part of the employee and the general work environment. The groupfactors embody work-based relationships and are the most discussed inthe empirical literature on employee motivation. The relationshipbetween employees within an organization has been found to becritical in influencing their motivation in a variety of ways. Whileassessing the significance of job-based relationships among employeeswith regards to work force motivation, Lowe &amp Schellenberg (2001)noted that the success of businesses depended on the type of employeeinteractions in the daily operations of businesses (p. 8). Thefindings of Lowe &amp Schellenberg (2001) have been replicated byseveral other studies. The studies show that the work-basedrelationships, such as the relationships between employees and tradeunions and employers usually determine the quality of work and are acrucial factor in employee motivation (Towers &amp Perrin, 2003, p.232: Baker, 2003, p.34: Short, 1998, p. 89). While undertaking adetailed study to critically analyze the work-basedrelationship-motivation nexus, Maier (2007) ascertained that thejob-based relationships, when healthy, usually lead to employee jobsatisfaction, increases turnover and leads to general work forcemotivation (p. 6). Moreover, some scholars have concluded thathealthy relationships amongst employees in organizations usuallyprovide the foundation on which organizational relationships areanchored (Baker, 2003, p.47).

Existingbody of literature on the importance of group factors in enhancingemployee motivation have also espoused that the verticalrelationships as well as the horizontal relationships that exist atthe work place has become the key tenet of employee motivationstrategies. This, it is established, enhances the working environmentbetween employees since it diffuses tension, which is typical of thework place environment (Houkes et al, 2001, 23). Some studies haveeven recommended the deliberate building of productive relationshipsbetween employees both vertically and horizontally to lay the basisfor an organizational long-term success (Maier, 2007, p. 6). In fact,Lowe&amp Schellenberg (2001) noted that a healthy working relationshipin an organization is more effective in ensuring job satisfaction ascompared to remuneration packages (p. 7). Quite to the contrary, apoor job-based relationship is usually associated with demotivationof work force, increase in job turnovers, reduces employeesatisfaction and reduces the overall organizational productivity(Baker,2003, p.47: Maier, 2007, p. 6: Towers &amp Perrin, 2003, p. 232).It has also been established that the key ingredients of the desiredtype of relationships are commitment, trust and effectivecommunication (Baird&amp St-Amand, 1995, p.98: Houkes et al, 2001, 23).


Individualfactors refer to the constructs of motivation that pertain to theindividual. These constructs encompass various interests of theindividual such as possibilities of career growth, job security andwhether the individual motivation is intrinsic or extrinsic. Previouswork in this area has been conducted with respect to the response ofthe individual to management practices in organizations. Most of theorganizational strategies developed targeting the individual areanchored on certain assumptions of human nature and human behavior(McGregor, 1960, p. 33). It is assumed that in general, managersusually assume that employees are not passionate with the tasksassigned to them and can only be conditioned to do so throughchannels of behavioral control (p. 34). However, there are somemanagers who build trust in their work force and are assured of theemployees’ cooperation. As concerns the styles of leadership, thecoercive and aggressive managerial techniques have been found toimpact negatively on employee motivation (Goleman et al, 2002, 67).Quite to the contrary, inclusive leadership leads to a hardworkingand motivated work force since the employees are in a freer workenvironment (Towers &amp Perrin, 2003, p. 232).

Responsibilityover Motivation

Thekey objective of this paper is to establish how managers of the MNEsand the SMEs in Saudi can motivate their employees in the context ofthe policy of Saudization. In order to achieve this, it is criticallyimportant to review the wide literature on employee motivation toestablish who exactly is responsible for motivation. There is ageneral, undisputable consensus in the literatures that theorganizational leadership is tasked with facilitating the motivationof employees in an organization. However, there is also a generalagreement that the employee is ultimately responsible for their ownmotivation at the work place (McGehee,2001, p.443: Bruce, 2003, p. 33 Lubans, 2000, p. 324: DiMattia,2000, p. 54).Essentially, in as much as the organization’s top management has aleading role is ensuring the work force is motivated theresponsibility of work force motivation does not rest solely on them.The creation of work force motivation is a joint effort between theorganizations leadership and the employees since in idealcircumstances, both parties stand to gain from the proceeds ofmotivation (Bruce,2003, p. 33).While undertaking a study to find a solution to the low motivationlevel in some organizations, Lubans (2000) ascertained that the roleof the organization’s top management, as much as it is no adequateto ensure employee motivation, it sets the tempo. The study concludedthat the organizational leadership has a guiding role to clearlydefine the roles of employees, ensuring effective communication ofgoals in an organization and making binding decisions (P. 220)

ResearchConceptual Framework

Fromthe vast literature review undertaken in the preceding section, thisdissertation seeks to adopt a conceptual framework that will shapethe course of the remaining work. The literature review in thischapter has yielded three major factors that impinge on employeemotivation: organizational factors, group factors and individualfactors. This section of the dissertation will analyze how the threecategories of factors interact to motivate employees in anorganizational context in a fashion described by figure 1.2 below.From the discussion in the literature review, the organizationalfactors are mostly occasioned by managers at their places of work andimpact directly on the extent to which employees are motivated. Anapt example explored in a variety of literatures is the leadershipstyle used at the place of work where a more inclusive leadership isfound to boost employee morale and ultimately, productivity.Moreover, it has been established that different managementstrategies affect differently on employee motivation, jobsatisfaction and organizational productivity (McClelland&amp Burnham, 2003, p. 125: Scott, 2001, p.295: Houkeset al, 2001, p. 23)

Figure1.2:Research Conceptual Framework

Organizational Factors:

Factors based on the organizational practices of human resource such as the leadership styles, company mission &amp vision, work place atmosphere and managerial creativity.

Saudization Policy Ceilings on number of expatriate employees, discriminatory pay

Group Factors:

These majorly relate to the social aspects/ circles around an employee in an organizational setting such as the job-based relationships, effective communication and team building activities.

Employee Motivation:

This is the dependent variable, which is determined by a combination of organizational, group and individual factors. It is an internal force which drives employees to achieve individual and organizational goals (Lindner, 2004, p.1).

Outcomes/ Spillovers:

-Increased productivity

-Reduced turnovers

-Job satisfaction

Individual Factors:

These are the individual attributes and general orientation towards efforts aimed at motivating them. These include the nature of the drive i.e. intrinsic or extrinsic and other aspects such as job security, career advancement and reputation.

Aleadership style that recognizes employees through reward has alsobeen found to be very effective in motivating employees. The rewardserves to give the employee a sense of belonging as much as it doesshow appreciation. This idea of rewarding employees, especially asespoused in the literature, draws largely from the reinforcementtheory in which rewarding exemplary performance is likely to lead tothe repetition of that behavior. However, the organizational factorsdo not affect of employee motivation in isolation. The organizationalfactors interact with group and individual factors to ensure that allthe dimensions of employee motivation are achieved. The relationshipsbetween employees at the work place have been found to be verycritical in creating a motivated work force (Baker, 2003, p.47). Ineffect, managers can enhance employee motivation through teambuilding activities and structuring effective relationships amongstemployees. The individual factors, which are personal predispositionsas far as motivation efforts are concerned, play the most importantrole of ensuring that the efforts of employee motivation materialize.When individuals have a feeling of job security and see theorganization as offering career growth opportunities, they feelmotivated to work even better. Managers who are able to ensure thatthat employees have a secured future and essentially, that there ismore to the connection between the employee and the organization overthe labor-remuneration relationship will be certain to have amotivated work force. The conceptual framework in this dissertationrecognizes the importance of these factors especially how theyinteract to ensure that the employees are eventually motivated. Theconceptual framework adopted in this study is modified to includeSaudization policy since the study seeks to establish the extent towhich employees in the MNEs and the SMEs in Saudi Arabia can bemotivated in the context of Saudization.


Drawingfrom the previous works in this discipline, it appears quite obviousthat there exist some relationships between the dependent andindependent variables that the study seeks to use in the precedingsection. Both theory and empirical literature review have espousedsome expected outcomes (motivation) if certain specific strategiesare pursued. The study therefore adopts, among other implicithypotheses the following:

  1. H0: Rewarding for employees leads to motivation.

H1:Rewards for employees do not lead to workforce motivation.

  1. Ho: Saudization negatively affects employee motivation.

H1:Saudization does not affect negatively on employee motivation.

  1. H0: Managerial practices greatly influence the level of employee motivation.

H1:Managerial practices do not greatly influence the level of employeemotivation.

Theempirical analysis in the following sections will seek to test if theabove premises are true.


Thissection provides the description of the data that was used in thispaper and outlines the techniques that were utilized in thecollection and analysis of the data including samples of theinstruments used to collect data. Additionally, this section alsopresents the research design and the ethical considerations inresearch as they arose during the gathering of data.


Thispaper adopts the use of qualitative methods in order to explore thechannels through which managers in the MNEs and the SMEs in SaudiArabia can motivate employees in the context of the Saudizationpolicy. Based on the objectives outlined in the first section of thispaper, qualitative techniques will be critical to the endeavor ofthis paper. Qualitative techniques like the application of attitudescales including the Likert scale and ordinal scales will beimportant in obtaining the measures of different effects on theextent of employee motivation. Qualitative techniques also come inhandy since using scales and through assigning of human attributes tosome framework, it is possible to obtain cardinal values. The use ofqualitative techniques in an overly subjective and abstract researchlike this one is also backed by the finding by most psychologicalresearchers over time that human values and attributes can bemeasured objectively (Robson, 2007, p.45). Qualitative research hasalso been established as the most appropriate technique incomprehending the in the natural settings of critical and interveningfactors. Qualitative techniques enable researchers to comprehend,illuminate and most importantly extrapolate their empirical outcomes(Golafshani,2003, p. 600).Forthis reasons, the various qualitative approaches will be applied inthis study to come up with robust empirical findings. Moreover, thispaper seeks to capitalize on the combined advantages of the variousqualitative techniques while reducing as much as possible thenegative effects of such methods. In qualitative research techniques,the researcher is the key tenet of the endeavor. In this respect, theresearcher ought to have deep and extensive knowledge of the variousconstructs of research such as the expected biases and levels ofdetachment, research designs as well as the merits and demerits ofthe techniques being employed which are all based on the efforts ofthe researcher (Holloway&amp Wheeler, 2009, p. 322).

Thisdissertation used a comprehensive research approach, whichincorporates a variety of qualitative analyses such that the researchproblem as identified in the first section of this paper is addressedfully. The approach adopted here was instrumental as it enabled theuse of qualitative techniques just as espoused by Klenke (2008, p.23) to facilitate the prediction of the variations in the responsevariable of the study, techniques which are typical for such tasks(Muijs, 2010). The techniques employed in this dissertation aredescriptive and correlational. Correlational techniques come in handysince they are crucial in establishing existence of relationshipsbetween concepts (dependent variables and in independent variables).Moreover, the correlational techniques have been found to be criticalfor studies that require a high level of ethical standards (Robson,2007, p.45) which this study happens to be. The descriptivetechniques are widely applicable in almost all types of researchsince they enable researchers to describe phenomenon and concepts(Muijs, 2010, p. 23). In this particular dissertation, descriptivetechniques were employed in gathering information concerning theeffects of Saudization on the human resource management practices inSaudi Arabia.

Roleof the researcher

Theresearcher usually has a cornerstone role to play in any kind ofresearch. However, the role of the researcher is even bolder inqualitative research since the researcher exercises his discretionover several aspects of the study, which is not the case withquantitative techniques. The discretion exercised by the researcherin qualitative research begins in the selection and subsequentnarrowing down to the topic of research. The researcher then chosesthe study elements and uses the most appropriate criteria to obtaindata for the study, which then forms the foundation of the study. Forinstance, in this dissertation, the researcher obtained theperceptions of the managers and employees in the MNEs and SMEs inSaudi to form the basis of the study analysis. More aptly, the roleof the researcher was therefore to come up with the topic of study(depending on his interests), develop suitable instruments ofresearch, obtain data and undertake data analysis.

Unitof Analysis

Sincethe study seeks to ascertain how the MNEs and SMEs in Saudi undertakeemployee motivation in the context of Saudization, the dissertationadopted a single individual as the unit of research analysis. Theresearcher, having identified the individual as a unit of analysis,designed questionnaires and structured interviews with the identifiedstudy population. The individual responses obtained would thenaggregated and augmented to come up with valid and reliable outcomesas concerns the perception of the MNEs and SMEs concerning employeemotivation efforts in the context of Saudization.

Respondentsof the study

Thisstudy identified the Multinational Enterprises (MNEs) and the Smalland Medium Enterprises in the Saudi private sector as the bestresearch setting of the study. This is so because the Saudizationpolicy was designed to set a ceiling for the number of expatriateemployees in the private sector in Saudi, which is, 95% composed ofthe MNEs and SMEs (Asad &amp Henderson, 2011, p.411).This type of achange in the policy framework of course did impact on the humanresource practices of these entities and they therefore provide arich research ground for studying work force motivation I the contextof Saudization. The respondents for this study were drawn from theleadership andemployees of these organizations in in whichrepresentativeness was crucial in terms of remuneration,professionalism, gender, organizational structure and fringebenefits.


Theresearch strategy that was used by this research paper was anchoredon the pooled benefits of using various qualitative techniques. Theresearch strategy majorly relied on these techniques since they havebeen found to facilitate a high level of detachment of the researcherfrom the processes and the outcomes of the paper (Bryman, 2006). Thisis very necessary since the outcomes of a research process should bebased on empirical facts and not the sheer instincts of theresearcher. This technique was as much critical in providing for thelogical structure of the entire process, which facilitates the flowof work. This is so even as the technique lacks grossly in validityand enhances the use of logic at the expense of certain crucialprocesses (Robson, 2007). The survey process that was used in thistechnique was equally tedious and time consuming. The vital roleplayed by this technique in the study cannot be underestimated. Theresearch strategy allocated it the crucial task of ascertaining themost effective vocabulary learning strategy.


Anchoredon the objectives of this dissertation, the methodology hereinadopted a purposive sampling technique just like was the case in Mark&amp Sockel (2001) and Towers &amp Perrin (2003) which were bothrigorous and robust studies. The use of purposive sampling has gainedwide usage in qualitative research because it enhances comprehensionof individuals and facilitates extrapolation of outcomes to gaincompletely new insights (Devers&amp Frankel, 2000, p. 264).After identifying the most appropriate sampling frame for the study,which included all the MNEs and SMEs with more than 100 multinationalemployees, it became necessary to familiarize with the potentialrespondents to establish a good rapport with them. This exercise wasnot only necessary to ensure their compliance as far as providingresponses to the questionnaires and interviews are concerned but alsoto safeguard the reliability of the outcomes of this paper.Additional measures undertaken to ensure soundness in the sampleresponses was the use of a short proposal detailing the scope of thestudy as well as the use of privacy assurance statement. Eventually,the study obtained a sample size of 128 respondents. 28 of these weremanagers in the various human resource departments.

Dataand Data Collection Instruments

Thisstudy utilized both secondary and primary time series data. For somevariables, panel data was obtained and incorporated together with thepooled time series data. The data obtained relate to the periodbetween December 2014 and May 2015 in which 218 respondents wereinterviewed. Time series and panel data was suitable for this studysince it is critical to observe how the human resource strategieswith respect to employee motivation have evolved over time vis-à-visreal implementation of Saudization. The data, which is 95% primarydata, was collected using in a field survey conducted by experts whowere assisted by local students in the study area. As for thesecondary data, content analysis, which was done by qualifiedresearchers, was used to obtain data from secondary sources andsubsequently perform a cross-tabulation of the aggregated results.This method of scrutinizing and analyzing secondary data was usedsince it is a robust method in circumstances that involve analysis offigures and interpretation of tabulated outcomes (Hsieh &ampShannon, 2005). Moreover, this secondary sources review technique hasalways been found to provide an in depth analysis and refinement ofalready existing data (Klenke, 2008).

Inthe survey that was conducted, the collection of primary data wasdone using structured questionnaires, which consisted of bothopen-ended and closed questions. The questionnaires designed for thisstudy were divided into two sections A and B. Section A requiredpersonal details of the respondent including age, place of residence,gender, level of education, state of activity and marital status.Section B of the questionnaire consisted of both general and specificquestions regarding the perceptions of the respondents on variouslearning strategies and their shortcomings. The questionnaire used inthis study was designed in an attractive manner with questionsordered depending on the increasing degree of complexity to enticerespondents to respond to all questions as appropriate. The choice ofa questionnaire as the major tool for collecting primary data in thisstudy was informed by several advantages. First, the administrationof questionnaires by researchers on the field enabled respondents toseek clarification on questions that were not immediately clear tothem. Second, since the questionnaires advocated for anonymity,respondents (who are majorly human managers and employees in the MNEsand SMEs in Saudi) were much more likely to volunteer informationwithout fear of any form of victimization. Purposeful sampling wasused to identify potential respondents of these questionnaires asguided by the research objective in the first section of this paper.


Accordingto Singh and Richards (2003), missing data is rarely reported in moststudies. Missing data is often realized when the available data doesnot cover the themes required to cover the issues under study.Failure to adequately address all the issues that the studyoriginally intended to do is often takes as a personal failure on thepart of the researcher. The causes of missing data are diverse andmay include inappropriate research questions, methods of datacollection, data analysis methods as well as the ability of theresearcher to conduct the study. Missing data is usually common inqualitative studies but according to Singh and Richards (2003),missing data is also inevitable in quantitative studies. They pointout that missing data in qualitative research arises due to two mainreasons the first one being that the data collection process are notusually designed in advance to answer known questions. Secondly, theystate that qualitative studies aim at finding meaning andinterpretations and that since some respondents might now want toanswer some questions, missing data will definitely be present inqualitative studies as compared to quantitative studies that areapplied in this paper.

Todeal with the issue of missing data, the current study analyzed onlythose questionnaires that were fully completed. The questions weredesigned in such a way that respondents had an easy time answeringall the questions. A pilot survey was conducted to test therespondent friendliness of the questionnaires. The questionnaireswere presented to 50 participants who were randomly selected from theUniversity. This pool of participants was made up of an equal numberof men and women aged between 18 and 30 years. Their responses aswell as reaction to the questions were observed and analyzed.Difficulties and ambiguities were noted and later on corrected.

Appropriatestructuring of the research questions also ensured that incidences ofmissing data were minimized. The problem of missing data was alsodealt with through testing the proposed theories by re-analyzing thedata and testing it against the existing studies on individualinvestors’ attitudes and behavior. Singh and Richard (2003) are ofthe view that missing data is important for the emergence and testingof theory and that it also leads to the discovery of new questions.


Inthis section, the study employed factor analysis to manipulate thedata with the identified controls to test the hypotheses generatedfrom the literature review. The primary data collected from the fieldusing questionnaires was fed into computer software in specificformats with coding mechanisms for attributes and subsequentlyanalyzed using STATA 12 Software. This process also enabled theidentification of the variables of study as they manifest from theanalysis of the obtained data. It is important to note that in asmuch as data analysis is an empirical procedure it is guided by thetheoretical background of the study, which singles out theanticipated variables of the model.

Thematicanalysis will as much be used in this study. Patterns in the datawill be identified through a process involving a number of stepsincluding data familiarization, coding, theme development as well asrevision. The approach requires more involvement and interpretationfrom the researcher since it goes beyond simple counting of phrasesor words (Braun and Clarke, 2006). The approach is theoreticallyflexible, meaning that it can be adopted within different frameworksand in answering different types of research questions. Additionally,the approach is suitable for research questions that relate to theviews, experiences of perceptions that people have. The flexibilityof thematic analysis facilitates rich, detailed and complexdescription of data.

Contentanalysis was used to systemically describe written, visual or spokencommunication. Any material recoded by a researcher can be analyzedthrough content analysis and facilitates quantitative description.This in turn makes it possible for the researcher to categorize datain such a way that it is reliable and valid. It involves the analysisof what is contained in a message. The approach conforms to the basicprinciples of scientific methods, which are objectivity, systematicand generalizability. Apart from being inexpensive, it is readilyunderstandable and does not require direct contact with people. Italso an effective tool when combined with other approaches such asinterviews and observations. It also makes it easy andstraightforward for reliability to be established. However, it ispure descriptive meaning that underlying themes that are notobservable may not be revealed. Additionally, it is limited byavailability of material. The results of this manipulations of datais usually meant to produce some descriptive statistics regarding thedata which include the mean, standard deviation, goodness of fit, thet-statistic and other statistical measures of dispersion andrelationships.

Validityand reliability

Moststudies emphasize the need of validity and reliability inquantitative research. The main idea underlying reliability as aconcept is that the findings from a given study must go beyond aone-off findings and that it should be possible for the results to bereplicated in another study. Other researchers should be able toobtain the same findings by utilizing the same procedures and undersimilar conditions. The current study built on other studiesconducted in the past and utilized similar methods. This was aimed atensuring that the results from the study are reinforced and that theproposed hypotheses are accepted by the wider academic community.

Onthe other hand, validity entails the whole experimental concept andestablishes whether outcomes of the study reflect the prescriptionsof the scientific research method. It ascertains whether the studytruly measures the concepts that it is supposed to measure. Thecurrent study aims at increasing the validity of its findings byutilizing triangulation. By utilizing a combination of methods, theresearcher was able to strengthen the research findings.Triangulation entails using different techniques of data collectionand data analysis. The choice of these techniques often depends onthe nature of the study. Validity of the current study was improvedby making sure that the objectives and aims of the study wereoperationalized and clearly defined. The goals and objectives of thestudy were also matched with the assessment measures in order toensure that they are relevant to each other. Additionally, themeasures obtained herein were related to those of other studies toidentify any possible differences in these measures.


Arigorous research applies the right research tools and methods inorder to meet its aims and objectives. Rigor is important inquantitative studies since it ensures that the findings of the studycarry enough strength and conviction to influence other studies. The choice of research methods and tools has far fetchingimplications on the research findings. The wrong choice of researchtools may result into ambiguous or meaningless findings, whichtranslate, to wasted resources and time. Wrong findings as a resultof utilization of inappropriate research tools may also result toadoption of harmful practices and recommendations. To improve thestudy’s rigor, the actions, opinions and biases of the researcherwere documented. Caution was observed to guarantee that the selectionof participants and methods were appropriate to the research questionand objectives. The researchers’ roles and activities wereadequately explained and the sources and means of verifying the datawere made explicit.


Thissection discusses the findings of the study as obtained from applyingthe methodology prescribed in chapter three. It presents the generaloutcomes of the study as well as some problems encountered in theprocess of data analysis. This chapter sets out to present theoutcomes of the empirical study carried out to establish themotivational factors employed in the MNEs and SMEs in Saudi in thecontext of the Saudization policy. Moreover, presented here are theperceptions of multinational employees in the SMEs concerning whatthey consider as the most important factors that effectively motivatethem. The outcomes of the survey discussed below according to how thequestionnaire was structured. The questionnaires were administered tothe selected 100 employees while the 28 managers were intervieweddirectly by the researcher.

Outcomesof the Survey

Itwas observed that a majority of employees 76% felt thatorganizational factors were very important in ensuring motivation atthe work place. However, only 24% felt that the organizationalfactors did not play a key role in employee motivation. When askedabout their perception on the impact of specific organizationalfactors (i.e. organizational mission and vision, managerialcreativity,leadershipstyles and work place atmosphere), the responses were quite varied.Concerning the significance of organizational mission and vision inenhancing employee motivation, 46% strongly agreed that theirrespective organizational mission and visions were significant inimparting motivation in them, 33% agreed, 4% neither agreed nordisagreed, 10% disagreed while 7% strongly disagreed. On managerialcreativity, which the research assistants were instructed to conveyto the respondents as any form of managerial innovation and anythingelse that denoted creativity, the responses were quite skewed. 20%strongly agreed that managerial creativity indeed enhanced motivationamongst employees, 39% agreed, 1% neither agreed nor disagreed, 36%disagreed while 4% strongly disagreed.

Onthe leadership styles employed in the organizations, the respondents,who were employees, were guided to the effect that they observe thegeneral policies at work, handling of disputes by the management andthe communication structures of the organization. As to whether thesekinds of strategies,when effectively and positively employed by therespective organizational leadership led to employee motivation,34% strongly agreed that their respective organizational practiceswere significant in imparting motivation in them, 45% agreed, 6%neither agreed nor disagreed, 13% disagreed while 2% stronglydisagreed. In this question, the researcher had noted chancespossibilities of ambiguity on the part of the respondents. Theresearcher felt that the respondents may conceive this question asrequiring them to indicate whether In order to control for thisambiguity, the researcher rephrased this question to “Can theapplication of an all-inclusive, listening leadership motivate you atwork?”. Having done this, the respondents found it easy tocomprehend the question. Moreover, no case of ‘non-response’ wasnoted for this question. The responses to the question which requiredthe respondents to note if a more relaxed working environment had animpact of increasing their motivation also was skewed towards theaffirmative. Asked whether a more relaxed working environment had aneffect on their levels of motivation, 22% strongly agreed that theirrespective organizational practices were significant in impartingmotivation in them, 55% agreed, 3% neither agreed nor disagreed, 15%disagreed while 5% strongly disagreed. The responses from thequestionnaire are summarized in the table 1.0 below. The ‘statement’column gives signals to the question to which the respondents weresubjected.

Table1.0:Results of the Survey (Responses from the questionnaires)


Statement/ Question:

The following aspects enhance motivation at work:

Response (%)

Strongly Agree


Neither Agree nor Disagree


Strongly Disagree


Organizational Factors:






  1. Company Mission &amp Vision

  1. All-inclusive leadership






  1. Relaxed, freer working atmosphere






  1. Managerial creativity







Group Factors:






  1. Work-based relationships

  1. Effective organizational communication






  1. Team building activities







Individual Factors:






  1. Job security

  1. Training and development opportunities






  1. Need to build a reputation at work






  1. Intrinsic rather than extrinsic drive







Saudization policies






Thefigures in parentheses ( ) ** show the deviations from other outcomesi.e. a much higher/lower column figures thus an indication adifferent pattern in the obtained responses.

Themanagers were equally interviewed on the challenges of ensuring amotivated work force while at the same time implementing theconditions of the Saudization policies at the work place. Moreover,they were asked on the most effective strategy they used to ensure amotivated work force. The questions administered to the managers weremore general as compared to those administered to the employees. Theymajored on the organizational, group, individual and more attentionwas laid on the dynamics occasioned by Saudization policy. 79% of themanagers felt that individual factors were the most important factorsin influencing employee motivation while 21% felt otherwise. Theresponses concerning the three categories of factors wereadministered using an interval ratio scale as prescribed in themethodology. In this respect, 42.85% of managers felt thatorganizational factors were the very important factors to theorganization in influencing employee motivation, 25% felt theorganizational factors were important, 17.86% felt the organizationalfactors were neither important nor unimportant, 7.14% felt they wereunimportant while 7.14% felt they were very unimportant. The skewedresults relative to the other factors are reflected in the standarddeviation of 1.145. Concerning group factors, 35.71% of managers feltthat group factors were the very important factors to theorganization in influencing employee motivation, 32.14% felt theywere important, 14.28% felt the organizational factors were neitherimportant nor unimportant, 10.71% felt they were unimportant while7.14% felt they were very unimportant. The summary for these resultsare provided in the table 2.0 below.

Table2.0: Manager Responses


Response (%)

Very important


Neither Important nor Unimportant


Very Unimportant

Standard Deviation

Organizational Factors







Group Factors







Individual Factors







Thefigure in parentheses ( ) ** shows the deviation from other outcomesi.e. a much lower standard deviation indication a different patternin the obtained responses. See Appendix 2 &amp 3 for how the figureswere obtained from STATA 12. Note that data was coded as 1-VeryImportant 2-Important, 3- Neither Important nor Unimportant,4-Unimportant and 5-Very Unimportant.

Despitethese outcomes, the managers also noted that it is particularlyimportant that the multinational employees are ‘made to feel athome’ in the organizational setting as well as outside the workplace. Moreover, exercising anything that suggests utmost equity atthe work place is also very critical because the managers observedthat the employees are ‘very sensitive’ to discriminationespecially since they are the primary targets of Saudization policy.A majority of managers (20/28) were however quick to observe thatthey undertake the ordinary measures of motivating employeesuniversally because much emphasis on the multinational employeesalone would ‘demotivate’ the Saudi employees while at the sametime that very action may make the multinationals feel like‘outcasts’ who needed ‘special attention’. Most managersalso noted that creating a family environment served to motivate themultinational employees. There seemed to be a consensus establishedin the responses of the managers with a majority of them noting thatmotivated workforce led to increased productivity and reduced jobturnovers.


Thischapter analyzes the results presented in the preceding section(chapter four) and reconciles the theoretical prescriptions inchapter two with the outcomes of the study as presented in chapterfour.


Theoutcomes presented in both table 1.0 and table 2.0 in chapter fourprovide adequate evidence showing that organizational factors areindeed important factors in the motivation of a work force. In asmuch as this particular study is unique because it sought to explorethe motivational factors of multinational workers in Saudi SMEs inthe context of Saudization policy, the results do not differ muchfrom those of previous outcomes. The outcomes show that a relaxedworking environment, an effective mission and vision, managerialcreativity and an all-inclusive leadership leads to employeemotivation just as was the case in Mark &amp Sockel (2001), Lawler(1969), Nohria (2008), Egan (2004) and Rynes et al (2004). Theoutcomes also conform to the prescriptions of the Goal-settingtheory, which proposes that setting of goals will serve to motivateemployees.


Job-basedrelationships, effective organizational communication as well as teambuilding activities have been found to be as much importantmechanisms of employee motivation. Since this study interviewed onlythe multinational employees in an organization, it was important toexamine their attitudes towards the nationals with respect torelationships stretching beyond the organizational tasks. A majorityof respondents were motivated by these social ties and there is apossibility that the social ties enable them to ‘feel wanted’ and‘equally important’ as most respondents stated. The outcomes formanagers tallied with those for employees. Moreover, some managersconfessed to targeting the social ties as a foundation to anchorother motivational strategies. These outcomes confirm the findings ofLowe &amp Schellenberg (2001), Baker (2003), Towers &amp Perrin(2003), Towers &amp Perin (2003) and Houkes et al (2001).Additionally, the outcomes are in support of Maslow’s hierarchy ofneeds and the ERG Theory, which espouse that individuals usuallyaspire to acquire social needs and are rightly so, motivated.


Thatintrinsic motivation is more effective than extrinsic motivation isnot a peculiar outcome of this study. This has been confirmed beforeeven in the implications of Herzberg’s theory of motivation andhygiene. Job security, training and building professional reputationwere also found to be significant factors in ensuring a motivatedworkforce. Howevertypical these outcomes are to research findings on motivation ofemployees, they are granted special interpretation in this study. Forinstance, if a multinational employee feels that the SME that heworks for is not likely to implement Saudization to the letter, theemployee is likely to be motivated since that is a form of jobsecurity.The findings herein echo the outcomes of previous studies likeMcGregor (1960), Goleman (2002), Bruce (2003) and Scott (2001).

EmployeeMotivation vis-à-vis Saudization

Theoutcomes of this study espouse the effects that Saudization has hadon the human resource practices in Saudi Arabia. The followingstatement by a human resource manager in a leading SME in Saudi couldnot illustrate it better.

Whatwe have today in our human resource practice is a control experimentwhich involves crafting strategies that ensure both Saudi nationalsand the expatriate employees are motivated and united in light of thefact that some labor market policies (read Saudization) progressnotions of other employees (nationals) being better than others(expatriates). It is a situation that calls for a delicate balancebetween implementing sound organizational policies and compliance tothe law”. – Respondent.

Theessence of this statement is that the policy of Saudizationintroduced complexities in the manner in which organizationalstrategies and by extension, work force motivation, was beingundertaken in Saudi Arabia, albeit in the private sector. This hasbeen reflected in the outcomes of the study as presented in chapterfour and the exact influence on motivation is hinged on the fact thatnotions of equity are pertinent to employee motivation. This echoesthe prescriptions of the Equity Theory of Motivation reviewed inchapter two of this dissertation. However, managers are handling thesituations differently depending on nature of the multinationals intheir organizations. From the outcomes of the survey, Saudization hasgreatly influenced the motivation of non-Saudi employees in thecountry but the situation can be controlled if the SMEs humanmanagements are able to adopt innovative approaches to ensure equityat the work place and additionally make expatriate employees ‘feelat home’.

CHAPTERSIXIntroductionThisis the final section of the dissertation, which synthesizes theimplications of the research findings and relates them to theultimate objective of the paper. In prescribing the applicability ofthe findings of this dissertation, this section does present theintervening factors that need to be taken into account especiallywith the controls applied to obtain the results herein. The scope ofthe paper is reflected by prescribing a niche for future research inthis discipline.Relatingoutcomes to the Research Objectives

Theoverriding objective of this dissertation was to ascertain howmultinational employees of SMEs in Saudi Arabia could be motivated inlight of the Saudization policy. The outcomes of the paper havehowever been granted customized interpretation due to the setting inwhich the study was undertaken. The outcomes of the empiricalanalysis have provided support for all the hypotheses of the study.First, Saudization has been found to impact negatively on the humanresource practices in Saudi private sector and specifically on theprivate sector, which was the primary preoccupation of theSaudization policy. Moreover, the outcomes exceeded the set scope bynot only providing adequate evidence to support the hypothesis buthave also espoused the mechanisms through which the policy impacts onemployee motivation in the Saudi SMEs. First, Saudization leads tosegregation of the work force based on nationalities, which makes itdifficult to achieve teamwork in the various organizations. Theimplications for the human resource managers are to the effect thatthere is an urgent need to undertake team-building activities toensure a united work force. Another interesting outcome is that thepolicy has served to espouse the Saudi nationals as being superior tothe expatriates by recommending certain remuneration structures thatare in favor of the nationals as also observed by Asad &ampHenderson(2011, p.411). This has managerial implications, the managersinterviewed in the survey carried out by this study confessed tohaving challenges in handling the problem. However, what came outclearly is that there is need to ensure utmost equity at work todiffuse the tensions resulting from this policy implication.

Nevertheless,managers in the multinational organizations as well as the employeesthemselves reported that organizational factors, group factors andindividual factors all led to employee motivation. Specifically, thisstudy has espoused that a relaxed working atmosphere, effectivecommunication, effective organizational mission and vision, job-basedrelationships, opportunities for career advancement, job security anda self-initiated need to build professional reputation all lead toemployee motivation. Caution should however be taken in understandingthe outcomes of this dissertation to the effect that these factorsare effective in employee motivation in the Saudi SMEs aftercontrolling for two intervening effects of Saudization: disunityamong workers and discrimination.

Limitationsof the study

Thestudy sampled 100 employees and 28 managers from a total of 16 SMEsin Saudi Arabia. With a larger sample size, more insights can begenerated from such an endeavor. Moreover, the study only interviewedthe expatriate (multinational) employees of the SMEs in the Saudiprivate sector. This limited to scope of the study, as it cannot beused to inference for the motivational factors of the Saudi nationalswith certainty.


Futureresearch in this discipline should focus on how private sectororganizations can ensure unity and utmost equity at the work place.This would be important since the two negative externalities ofSaudization have been espoused by this dissertation as the channelsthrough which Saudization affects negatively on human resourcepractices and by extension, workforce motivation. Findings of suchstudies would be important to not only the human resource managementbut also general operational efficiency in SMEs and other privateentities in Saudi Arabia.


Motivationof workers has been found to result in productivity, job satisfactionand a reduction in turnovers the world over. Ensuring motivation ofmultinational employees in the SMEs in Saudi Arabia is however quitetricky as the managers have to ensure unity and equity at the workplace prior to implementing conventional employee motivationstrategies which have been found to be effective in the SMEs all thesame.


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Appendix1: Demographic Characteristics of Respondents




Gross Monthly salaries (AED)







Post Graduate Qualification

College, Graduate and Post graduate


29-49 years



Human Resource Managers

Floor cleaners, messengers, managers and heads of departments


20 Male and

8 Female

73 Male and 27 Female


2 Local

26 Expatriates


Appendix2: Outcomes for table 2.0 STATA 12.Appendix3:Standard Deviations (Table 2.0)Appendix4:Questionnaire.

TheQuestionnaire: Section B

  1. Organizational Factors

  1. Leadership styles in my organization influence motivation

  1. Strongly Agree { }

  2. Agree { }

  3. Neither Agree nor Disagree{ }

  4. Disagree { }

  5. Strongly Disagree { }

  1. My organization’s mission and visions affect my motivation.

  1. Strongly Agree { }

  2. Agree { }

  3. Neither Agree nor Disagree{ }

  4. Disagree { }

  5. Strongly Disagree { }

  1. My organization’s mission and visions affect my motivation.

I. StronglyAgree { }

II. Agree{ }

III. NeitherAgree nor Disagree { }

IV. Disagree{ }

  1. Strongly Disagree { }

  1. Reward for exemplary performance motivates me.

I. StronglyAgree { }

II. Agree{ }

III. NeitherAgree nor Disagree { }

IV. Disagree{ }

  1. Strongly Disagree { }

  1. A relaxed working atmosphere motivates me.

I. StronglyAgree { }

II. Agree{ }

III. NeitherAgree nor Disagree { }

IV. Disagree{ }

V. StronglyDisagree { }

  1. Effective communication in the organization enhances motivation.

I. StronglyAgree { }

II. Agree{ }

III. NeitherAgree nor Disagree { }

IV. Disagree{ }

  1. Strongly Disagree { }

  1. Managerial innovation and creativity.

I. StronglyAgree { }

II. Agree{ }

III. NeitherAgree nor Disagree { }

IV. Disagree{ }

V. StronglyDisagree { }

2.Group Factors

  1. A healthy relationship with my employee motivates me.

I. StronglyAgree { }

II. Agree{ }

III. NeitherAgree nor Disagree { }

IV. Disagree{ }

  1. Strongly Disagree { }

  1. Team building activities are frequent in my organization.

I. StronglyAgree { }

II. Agree{ }

III. NeitherAgree nor Disagree { }

IV. Disagree{ }

  1. Strongly Disagree { }

  1. Team building activities usually motivate me.

I. StronglyAgree { }

II. Agree{ }

III. NeitherAgree nor Disagree { }

IV. Disagree{ }

  1. Strongly Disagree { }

  1. Intrinsic motivation increases my performance at work more than extrinsic motivation

I. StronglyAgree { }

II. Agree{ }

III. NeitherAgree nor Disagree { }

IV. Disagree{ }

  1. Strongly Disagree { }

  1. I feel more secured working with my colleagues at my current job.

I. StronglyAgree { }

II. Agree{ }

III. NeitherAgree nor Disagree { }

IV. Disagree{ }

  1. Strongly Disagree { }

  1. My colleagues at work inspire me to work hard.

I. StronglyAgree { }

II. Agree{ }

III. NeitherAgree nor Disagree { }

IV. Disagree{ }

V. StronglyDisagree { }

3.Individual Factors

  1. Intrinsic motivation increases my performance at work more than extrinsic motivation.

I. StronglyAgree { }

II. Agree{ }

III. NeitherAgree nor Disagree { }

IV. Disagree{ }

  1. Strongly Disagree { }

  1. Job security at work makes me work much harder.

I. StronglyAgree { }

II. Agree{ }

III. NeitherAgree nor Disagree { }

IV. Disagree{ }

  1. Strongly Disagree { }

  1. There are training opportunities in my current job.

I. StronglyAgree { }

II. Agree{ }

III. NeitherAgree nor Disagree { }

IV. Disagree{ }

  1. Strongly Disagree { }

  1. Training opportunities at my current job motivates me.

I. StronglyAgree { }

II. Agree{ }

III. NeitherAgree nor Disagree { }

IV. Disagree{ }

  1. Strongly Disagree { }

  1. I work hard because I want to build a professional reputation for myself.

I. StronglyAgree { }

II. Agree{ }

III. NeitherAgree nor Disagree { }

IV. Disagree{ }

V. StronglyDisagree { }


  1. I feel more secluded at the work place due to the large number of Saudi nationals.

I. StronglyAgree { }

II. Agree{ }

III. NeitherAgree nor Disagree { }

IV. Disagree{ }

V. StronglyDisagree { }

  1. I feel more at home while at work.

I. StronglyAgree { }

II. Agree{ }

III. NeitherAgree nor Disagree { }

IV. Disagree{ }

V. StronglyDisagree { }

  1. I am as good as the nationals.

I. StronglyAgree { }

II. Agree{ }

III. NeitherAgree nor Disagree { }

IV. Disagree{ }

V. StronglyDisagree { }

  1. My colleagues who are not expatriates are supportive at work.

I. StronglyAgree { }

II. Agree{ }

III. NeitherAgree nor Disagree { }

IV. Disagree{ }

V. StronglyDisagree { }

5.Whatdo you think your organization should do to counter the negativeexternalities of Saudization? Why?_