Motivation is a highly individual matter. It depends not only on the actual needs of the employee, but also on his personality, experience and scale of values. The employee work motivation directly influences the company productivity. In order to achieve the maximum level of motivation, managers need to know their needs and motivating factors of employees they supervise. Money is the key motivation factor for people, who need money to maintain their own existence. Non-financial factors of motivation also have a growing importance on the individual employee motivation. The main objective of this paper is to determinate the main intrinsic and extrinsic factors of employee motivation, and its effect on the provided service quality in the "Postal Traffic -Department in Novi Sad". The research is based on Herzberg's Two-factor theory. The results of the research showed, that majority of the factors is rated fairly high. The "Salary" is the lowest rated factor, while the factor "Colleagues" have the highest effect on employee motivation.