The importance of motivation arises from its effects on organizational functions:
1) Motivation sets in motion the action of people: in every organization there are physical, financial and human resources. The utilization of physical and financial resources depends on the ability and willingness of people to work. Motivation puts human resources into action. Motivation builds the will to work among employees and enables the management to secure the best possible utilization of all resources.
2) Motivation improves the efficiency of work performance: motivation influences the level of performance of employees, which depends not only on individual's ability but also on his willingness to achieve a high level of performance. Motivation bridges the gap between the ability to work and willingness to work. Thus, it helps in increasing productivity, reducing the cost of operations and securing overall efficiency.
3) Ensures achievement of organizational goals: management can achieve the goals effectively by motivating subordinates to contribute their best efforts towards the fulfillment of the assigned tasks. If people are not motivated, no purpose can be served by planning, organizing and staffing functions. By meeting individual needs through a satisfactory system or rewards, the management can secure the cooperation of subordinates towards the accomplishment of organizational goals.
4) Motivation creates friendly and supportive relationship: motivation brings about employee satisfaction through monetary rewards, recognition of efficient work and promotional opportunities. Hence, it leads to cordial and friendly relationship between the employer and the employees. Industrial disputes are reduce and there is high moral . effective motivation helps management to overcome resistance to change. Motivated employees support all changes that are in the organizational interest as they identify their own advancement with the prosperity of the enterprise.
5) Motivation leads to the stability in the work force: motivation creates confidence in the subordinates and secures their loyalty to the organization. The rate of absenteeism and turnover is reduced. This results in maintaining a stable work force. The skill and experience of employees continue to be available to the advantage of the organization as well as the employees. The organization thereby builds a better image and is able to attract qualified and competent people.