The hostels provide different services, primarily accommodation services in rooms with multiple beds, and also additional content that they offer within their complex. For the success of such a business and the greater satisfaction of the guests who later spread the word about their experiences, the motivation and satisfaction of the employees is important. Motivation is influenced by different individual characteristics, job characteristics and organizational characteristics, and depends on the satisfaction of organizational and personal factors. To date, different theories of motivation for work have been developed, from content, process to modern, but also different material and non-material compensations. An employee reward system is a motivating factor to help employees better perform their work tasks and provide better quality hosting services to the guests. The analysis, entitled "Motivation and employee satisfaction, based on the example of a Zagreb hostel" shows the factors of motivation and employee satisfaction. It explores the Chillout Hostel, that has different brands within its facility: Hangout Bar, Njummy Restaurant, Chilloutka Conference Room, GUshTAM Travel Agency and Pub Crawl Zagreb. All this added content completes the quality of the facility and provides a variety of services to better satisfy its guests. However, the content itself is not critical to the satisfaction of guests, but rather the service provider or employee of each hostel. The more motivated and more satisfied the employees are, the more their guests are too, and this thesis will analyse this.