The second part is a theoretical background of the thesis. It is based on findings from the literature and previous research on motivation. This part contains author’s theoretical analysis in which he synthesize and ex-pound ideas upon the subject area in question. It consists of six subchapters which are organized in a deductive way, from the most general to the most specific one. Firstly, the concept of motivation is presented and clarified. Secondly, the most important content and process theories of motivation are introduced. In the third part existing research on the effects of motivation on employees are analyzed. Forth subchapter contains a comparison of research and theories on monetary and non-monetary motivators. Fifth presents findings from researches on employees’ choices of motivating factors. The last part of the theoretical chapter is focused on students and their motivation.