The Influence of Extrinsic Motivating Factors on Employees’ Work Performance at Banking Sectors in Malaysia: The Mediating Effect of Psychological Ownership

  • Kamalesh Ravesangar School of Business and Social Sciences, Albukhary International University, Malaysia
  • Muhammad Ashraf Fauzi Faculty of Industrial Management, Universiti Malaysia Pahang, Malaysia
Keywords: Extrinsic motivation, psychological ownership, work performance, banking sectors, Malaysia


This study investigates the influences of extrinsic motivating factors on employees' work performance in banking sectors in Malaysia when the psychological ownership act as mediating effect existed. Generally, this study analyses three independent variables, categorized as extrinsic (working condition, job security, and company policy) motivating factors on the dependent variable of employees' work performance when psychological ownership acts as a mediating effect in banking sectors in Malaysia. This study was conducted to determine employee work performance issues, namely, poor service quality, poor communication, high employee turnover, and work-related stress in Malaysian banking sectors. The research tools used in this study were personal distribution and online mail questionnaires. A total of 3700 frontline employees were selected for the questionnaire, but only 370 respondents are fit for further analysis. The survey data was gathered within a one-month duration. The findings revealed that work conditions and company policy have a significant favourable influence on psychological ownership. The following results show that psychological ownership positively mediates the relationship between company policy and work conditions with work performance. A theoretical framework has been constructed based on Herzberg's Theory of hygiene factors used in this research. The outcome of this study would help bank management introduce practical strategies for improving the employees' work performance which leads to business growth.


Ada, N., Alver, İ., & A. Fatma. (2008). Örgütsel iletişimin örgütsel bağlılık üzerine etkisi: Manisa organize sanayi bölgesinde yer alan ve imalat sektörü çalışanları üzerinde yapılan bir araştırma [The effects of organizational communication on organizational commitment: A research applied on employees of manufacturing sector on organized industry region of Manisa]. Ege Akademik Bakış, 8(2), 487-518.

Avey, J. B., Avolio, B. J., Crossley, C. D., & Luthans, F. (2009). Psychological ownership: Theoretical extensions, measurement and relation to work outcomes. Journal of Organizational Behavior, 30(2), 173-191.

Bernama. (2012, December 15). About 1,000 CIMB employees picket to defend rights. Malaysiakini.

Brown, G., Pierce, J. L., & Crossley, C. (2014). Toward an understanding of the development of ownership feelings. Journal of Organizational Behavior, 35(3), 318-338.

Campbell, J. P., McCloy, R. A., Oppler, S. H., & Sager, C. E. (1993). A theory of performance. In N. Schmitt, & W. C. Borman (Eds.), Personnel selection in organizations (pp 35-70). Jossey-Bass Publishers.

Cato, S. T., & Gordon, J. (2009). Relationship of the strategic vision alignment to employee productivity and student enrolment. Research in Higher Education Journal, 7, 1-20.

Daud. N, Hussain. A, Yunus. N, & Ishak. N.A (2013). The influence of intention to leave towards employee engagement among young bankers in Malaysia. International Journal of Business and Management, 8(14), 89-97.

DeKay, S. H. (2012). Doing what's right: Communicating business ethics. Business Communication Quarterly, 74, 287-288.

Dyne, L. V., & Pierce, J. L. (2004). Psychological ownership and feelings of possession: Three field studies predicting employee attitudes and organizational citizenship behavior. Journal of Organizational Behavior, 25(4), 439-459.

Eluka, J. C., & Okafor, N. C. (2014). A critical review of the effect of working conditions on employee performance: Evidence from Nigeria. A-Critical-Review-of-The-Effect-of-Working-On-%3A-ElukaNwonu/f7b1e3c21867f0cb15fad15b2f20a2d74c64391a

Fauzi, M. A., Martin, T., & Ravesangar, K. (2021). The influence of transformational leadership on Malaysian students' entrepreneurial behaviour. Entrepreneurial Business and Economics Review, 9(1), 89-103.

Finance Accreditation Agency (2020). Addressing talent scarcity in Islamic finance.

Fornell, C., & Larcker, D. F. (1981). Evaluating statistical equation models with unobservable variables and measurement errors. Journal of Marketing Research, 18(1), 39-50.

George, E. (2015). Job related stress and job satisfaction: A comparative study among bank employees. Journal of Management Development, 34(3), 316-329.

Ghafoor, A., Qureshi, T. M., Khan, M. A., & Hijazi, S. T. (2011). Transformational leadership, employee engagement and performance: Mediating effect of psychological ownership. African Journal of Business Management, 5(17), 7391-7403.

Goris, J. R. (2007). Effects of satisfaction with communication on the relationship between individual-job congruence and job performance/satisfaction. Journal of Management Development, 26(28), 737-752

Henseler, J., Ringle, C. M., & Sarstedt, M. (2015). A new criterion for assessing discriminant validity in variance-based structural equation modeling. Journal of the Academy of Marketing Science, 43(1), 115-135.

Herzberg, F. I., Mausner, B., & Snyderman, B. B. (1959). The motivation to work. Wiley.

Ibrahim, M. (2016, May 26). Muhammad bin Ibrahim: Future banking: reimagining banks - driving transformation and innovation [Keynote address]. Asian Strategy and Leadership Institute 20th Malaysian Banking Summit, Kuala Lumpur, Malaysia. 527b.htm

Jones, G. R. & George, M. J. (2008). Understanding and managing organizational behavior. Pearson Education.

Kassim, M. A., & Ibrahim, H. I. (2014). Conflict management styles and organizational commitment: A study among bank employees in Penang. International Journal of Business, Economics and Law, 4(1), 45-53.

Khan, A., Ahmed, S., Paul, S., & Alam Kamzi, S. H. (2017). Factors affecting employee motivation towards employee performance: A study on banking industry of Pakistan. Proceedings of the Eleventh International Conference on Management Science and Engineering Management, 615-625.

Kramer, M. W. (1999). Motivation to reduce uncertainty: Are conceptualization of uncertainty reduction theory. Management Communication Quarterly, 13(2), 305- 316.

Lau, S. Y., Chua, C. Y., Yap, P., Tay, L. P., & Ma, K. L. (2018). Job stress, work-life balance and life satisfaction among hotel employees: Proactive coping as a moderator (Unpublished doctoral dissertation).Universiti Tunku Abdul Razak.

Lim, Y. J., Osman, A., Abdul Manaf, A. H., & Abdullah, M. S. (2016). Antecedents and outcome to quit: Evidence from financial institution bank employees. Specialty Journal of Accounting and Economics, 2(1), 19-29.

Mansori, S., Tyng, G. G., & Mohd Ismail, Z. M. (2014). Service recovery, satisfaction and customers' post service behavior in the Malaysian banking sector. Management Dynamics in the Knowledge Economy, 2(1), 5-20.

Mayhew, M. G., Ashkanasy, N. M., Bramble, T., & Gardner, J. (2007). A study of the antecedents and consequences of psychological ownership in organizational settings. The Journal of Social Psychology, 147(5), 477-500.

Nduku, S. S., Mwenda, L., & Wachira, A. (2015). Effects of working conditions on performance of employees of Kenya commercial bank head office. International Journal of Current Research, 7(3), 14174-14180.

Noordin, N. F., & Panatik, S. A. (2015). The effect of psychosocial work environment on psychological strain among banking employees in Malaysia. Asian Social Science, 11(27), 287-297.

Olckers, C. (2013) Psychological ownership: Development of an instrument. SA Journal of Industrial Psychology, 39(2), 1-13.

Olckers, C., & Du Plessis, Y. (2012). Psychological ownership: A managerial construct for talent retention and organisational effectiveness. African Journal of Business Management, 6(7), 2585-2596.

Orpen, C. (1997). The interactive effects of communication quality and job involvement on managerial job satisfaction and work motivation. The Journal of Psychology, 131(5), 519-522.

Osabiya, B. J. (2015). The effect of employees' motivation on organizational performance. Journal of Public Administration and Policy Research, 7(4), 62-75

Pierce, J. L., Kostova, T., & Dirks, K. T. (2001). Towards a theory of psychological ownership in organizations. Academy of Management Review, 26(2), 298-310.

Pierce, J. L., Van Dyne, L., & Cummings, L. L. (1992). Psychological ownership: A conceptual and operational examination. In M. Schnake (Ed.), Proceedings of the Southern Management Association (pp. 203-211). Valdosta State University.

Ravesangar, K., & Muthuveloo, R. (2019). The influence of intrinsic and extrinsic motivating factors on work performance at banking sectors in Malaysia: The mediator role of psychological ownership. E-Jurnal Penyelidikan dan Inovasi, 6(2),51-70.

Redman, T., & Snape, E. (2005). Unpacking commitment: Multiple loyalties and employee behaviour. Journal of Management Studies, 42, 301-28.

Rubiah, R. B. (2012). A study on turnover intention trend in commercial bank in Penang, Malaysia (Unpublished master's thesis). Universiti Sains Malaysia.

Ryan, R. M., & Deci, E. L. (2000). Self-determination theory and the facilitation of intrinsic motivation, social development, and well-being. American Psychologist, 55(1), 68-78.

Ryan, R. M., & Deci, E. L. (2006). Self-regulation and the problem of human autonomy: Does psychology need choice, self-determination and will? Journal of Personality, 74(6), 1557-1586.

Senol, F. (2011). The effect of job security on the perception of external motivational tools: A study in hotel businesses. Journal of Economic and Social Studies, 1(2),33-60.

Shankar, J. V. (2014). A study on quality of work life and employee motivational strategies. International Journal of Scientific Research and Management, 2(5), 901-908.

Sledge, S., Miles, A. K., & Coppage, S. (2008). What role does culture play? A look at motivation and job satisfaction among hotel workers in Brazil. The International Journal of Human Resource Management, 19(9),1667-1682.

Tyler, T. R. (2005). Promoting employee policy adherence and rule following in work settings: The value of self- regulatory approaches. Brooklyn Law Review, 70(4), 1287-1312.

Van Dyne, L., & Pierce, J. L. (2004). Psychological ownership and feelings of possession: Three field studies predicting employee attitudes and organizational citizenship behavior. Journal of Organizational Behavior, 25, 439-459.

Viswesvaran, C. (1993). Modeling job performance: Is there a general factor? (Unpublished doctoral dissertation). The University of Iowa.

How to Cite
Kamalesh Ravesangar, & Muhammad Ashraf Fauzi. (2022). The Influence of Extrinsic Motivating Factors on Employees’ Work Performance at Banking Sectors in Malaysia: The Mediating Effect of Psychological Ownership. International Journal of Business and Society, 23(2), 1147-1168.