This study explores the positive effects of effective communication on employee motivation and performance. Specifically, in intends to compare the results between service employees and manufacturing employees in terms of communication as a motivating factor. The theories used in this study to create a conceptual framework are Herzberg Two factor theory, Goal Theory, and the circular theory of communication. The concept is that when hygiene and motivator factors are high, goals can be developed, but can only be effective only if the message was disseminated effectively. The study uses quantitative research on service and manufacturing employees. They were surveyed using a semi-structured questionnaire with ranking questions and some open-ended questions. The study found that there were only slight differences in the motivator factors for both set of respondents but there service employees are higher in hygiene. Both industries, however, see communication as an important factor in motivation. However, they only experience high hygiene, but less motivator, which means that they are not fully motivated. It has been suggested that the companies of the employees surveyed should invest on improving the motivator factors within the working environment and improve communication flows.

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THE PROBLEM AND ITS BACKGROUND This study examines the importance of communication on the performance and motivation of employees. The target samples of the study are employees from service and manufacturing companies. This allows seeing the importance of organizational communication in two different angles – that is the difference between the views of service and manufacturing companies regarding the matter. Comparison of these views may lead to the development of new hypotheses or theories that may contribute to human resource management research.