Employee motivation 1

Learning Objectives
1. Characterize the nature of motivation, including its
importance and basic historical perspectives.
2. Identify and describe the major content perspectives
on motivation.
3. Identify and describe the major process
perspectives on motivation.
4. Describe reinforcement perspectives on motivation.
5. Identify and describe popular motivational
strategies.
6. Describe the role of organizational reward systems
in motivation.

The Nature of Motivation
• Motivation
– The set of forces that cause people to behave in
certain ways.
– The goal of managers is to maximize desired
behaviors and minimize undesirable behaviors.
• The Importance of Motivation in the
Workplace
– Determinants of Individual Performance
• Motivation—the desire to do the job.
• Ability—the capability to do the job.
• Work environment—the resources to do the job.

Figure 16.1: The
Motivation Framework

Content Perspectives on
Motivation
• Content Perspectives
– Approaches to motivation that try to answer the
question, “What factors in the workplace motivate
people?”
• Content Perspectives of Motivation
– Maslow’s Hierarchy of Needs
– Aldefer’s ERG Theory
– Herzberg’s Two-Factor Theory
– McClelland’s Achievement, Power, and Affiliation
Needs

Motivation (cont’d)
• The Need Hierarchy Approach
– Maslow’s Hierarchy of Needs
• Physiological—basic survival and biological function.
• Security—a safe physical and emotional environment.
• Belongingness—love and affection.
• Esteem—positive self-image/self-respect and recognition
and respect from others.
• Self-actualization—realizing one’s potential for personal
growth and development.
– Weakness of Maslow’s theory
• Five levels of need are not always present.
• Ordering or importance of needs is not always the same.
• Cultural differences.

Figure 16.2: Maslow’s
Hierarchy of Needs

• The ERG Theory
– Needs are grouped into three overlapping
categories:
• Existence needs—physiological and security needs.
• Relatedness needs—belongingness and esteem by
others.
• Growth needs—self-esteem and self-actualization.
– ERG theory assumes that:
• Multiple needs can be operative at one time (there is no
absolute hierarchy of needs).
• If a need is unsatisfied, a person will regress to a lower-
level need and pursue that need (frustration-regression).

• The Two-Factor Theory (Herzberg)
– Satisfaction and dissatisfaction are influenced by
two independent sets of factors.
– Theory assumes that job satisfaction and job
dissatisfaction are on two distinct continuums:
• Motivational factors (work content) are on a continuum
that ranges from satisfaction to no satisfaction.
• Hygiene factors (work environment) are on a separate
continuum that ranges from dissatisfaction to no
dissatisfaction.

• The Two-Factor Theory (cont’d)
– Theory posits that motivation is a two-step
process:
• Ensuring that the hygiene factors are not
deficient and not blocking motivation.
• Giving employees the opportunity to experience
motivational factors through job enrichment.

Figure 16.3: The Two-Factor
Theory of Motivation

• Individual Human Needs (McClelland)
– The need for achievement
• The desire to accomplish a goal or task more effectively
than in the past.
– The need for affiliation
• The desire for human companionship and acceptance.
– The need for power
• The desire to be influential in a group and to be in control
of one’s environment.
• Implications of the Content Perspectives
– Content (what causes motivation) → Process (how motivation
occurs)

Process Perspectives on
Motivation
• Process Perspectives
– Approaches to motivation that focus on:
• Why people choose certain behavioral options to satisfy
their needs
• How they evaluate their satisfaction after they have
attained their goals.
• Process Perspectives of Motivation
– Expectancy Theory
– Porter-Lawler Extension of Expectancy Theory
– Equity Theory
– Goal-Setting Theory

• Expectancy Theory
– Motivation depends on how much we want something and
how likely we are to get it.
– Assumes that:
• Behavior is determined by personal and environmental
forces.
• People make decisions about their behavior in
organizations.
• People have different types of needs, desires, and goals.
• People choose among alternatives of behaviors in
selecting one that that leads to a desired outcome.
• Motivation leads to effort that, when combined with ability
and environmental factors, results in performance which
leads to various outcomes that have value (valence) to
employees.

• Elements of Expectancy Theory
– Effort-to-Performance Expectancy
• The employee’s perception of the
probability that effort will lead to a high
level of performance.
– Performance-to-Outcome
Expectancy
• The employee’s perception of the
probability that performance will lead to
a specific outcome—the consequence or
reward
for behaviors in an organizational
setting.

• Elements of Expectancy Theory (cont’d)
– Valence
• An index of how much an individual values a particular
outcome.
• It is the attractiveness of the outcome to the individual.
– Attractive outcomes have positive valences and
unattractive outcomes have negative valences.
– Outcomes to which an individual is indifferent have zero
valences.
– For motivated behavior to occur:
• Both effort-to-performance expectancy and performance-
to-outcome expectancy probabilities must be greater
than zero.
• The sum of the valences must be greater than zero.

Figure 16.4: The Expectancy
Model of Motivation

• The Porter-Lawler Extension of Expectancy
Theory
– Assumptions:
• If performance results in equitable and fair rewards,
people will be more satisfied.
• High performance can lead to rewards and high
satisfaction.
– Types of rewards:
• Extrinsic rewards are outcomes set and awarded by
external parties (e.g., pay and promotions).
• Intrinsic rewards are outcomes internal to the individual
(e.g., self-esteem and feelings of accomplishment).

Figure 16.5: The Porter-Lawler
Extension of Expectancy Theory

• Equity Theory
– People are motivated to seek social equity in the
rewards they receive for performance.
• Equity is an individual’s belief that the treatment he or
she receives is fair relative to the treatment received by
others.
– Individuals view the value of rewards (outcomes)
and inputs of effort as ratios and make subjective
comparisons of themselves to other people.
outcomes (self)
inputs (self)
=
outcomes (other)
inputs (other)

• Equity Theory (cont’d)
– Conditions of and reactions to equity comparisons:
• Feeling equitably rewarded.
– Maintain performance and accept comparison as fair
estimate.
• Feeling under-rewarded—try to reduce inequity.
– Change inputs by trying harder or slacking off.
– Change outcomes by demanding a raise.
– Distort the ratios by altering perceptions of self or of others.
– Leave situation by quitting the job.
– Change comparisons by choosing another object person.
• Feeling over-rewarded.
– Increase or decrease inputs.
– Distort ratios by rationalizing.
– Help the object person gain more outcomes.

• Goal-Setting Theory
– Assumptions
• Behavior is a result of conscious goals and intentions.
• Setting goals influence the behavior of people in
organizations.
• Characteristics of Goals
– Goal difficulty
• Extent to which a goal is challenging and requires effort.
• People work harder to achieve more difficult goals.
• Goals should be difficult but attainable.
– Goal specificity
• Clarity and precision of the goal.
• Goals vary in their ability to be stated specifically

• Characteristics of Goals (cont’d)
– Goal acceptance
• The extent to which persons accept a
goal as their own.
– Goal commitment
• The extent to which an individual is
personally interested in reaching a
goal.
• Implications of the Process
Perspectives
– If rewards are to motivate
employees, they must be perceived
as being valued, attainable, fair and
equitable.

Figure 16.6: The Expanded Goal-
setting Theory of Motivation

Reinforcement Perspectives on
Motivation
• Reinforcement Theory
– The role of rewards as they cause behavior
to change or remain the same over time.
– Assumes that:
• Behavior that results in rewarding
consequences is likely to be repeated, whereas
behavior that results in punishing
consequences is less likely to be repeated.

• Kinds of Reinforcement in Organizations
– Positive reinforcement
• Strengthens behavior with rewards or positive outcomes
after a desired behavior is performed.
– Avoidance
• Strengthens behavior by avoiding unpleasant
consequences that would result if the behavior is not
performed.
– Punishment
• Weakens undesired behavior by using negative
outcomes or unpleasant consequences when the
behavior is performed.
– Extinction
• Weakens undesired behavior by simply ignoring or not
reinforcing that behavior.

• Providing Reinforcement in Organizations
– Reinforcement schedules
• Fixed interval schedule—reinforcement applied at fixed
time intervals, regardless of behavior.
• Variable interval—reinforcement applied at variable
time intervals.
• Fixed ratio—reinforcement applied after a fixed number
of behaviors, regardless of time.
• Variable Ratio—reinforcement applied after a variable
number of behaviors, regardless of time.

Table 16.1: Elements of
Reinforcement Theory

• Providing Reinforcement in Organizations
(cont’d)
– Behavior modification (OB mod)
• A method for applying the basic elements of
reinforcement theory in an organizational setting.
• Specific behaviors are tied to specific forms of
reinforcement.
• Implications of the Reinforcement
Perspectives
– Consistently applied reinforcement helps maintain
employee motivation by:
• encouraging (rewarding) positive behaviors
• discouraging (punishing) dysfunctional behaviors in an
organization.

Popular Motivational Strategies
• Empowerment and Participation
– Empowerment
• Enabling workers to set their own work goals, make
decisions, and solve problems within their sphere of
influence.
– Participation
• Giving employees a voice in making decisions about
their work.
– Areas of participation for employees:
• Making decisions about their jobs.
• Decisions about administrative matters (e.g., work
schedules).
• Participating in decision making about broader issues of
product quality.

Popular Motivational Strategies
(cont’d)
• Techniques and Issues in Empowerment
– Using work teams
• Collections of employees empowered to plan, organize,
direct, and control their work.
– Decentralization
• Changing the overall method of organizing the firm
– Conditions necessary for empowerment:
• Power spread to lower organizational levels
• Commitment to empowering workers
• Systematic and patient efforts to empower workers.
• Increased commitment to training.

Using Reward Systems to
Motivate Performance (cont’d)
• Reward System
– The formal and informal mechanisms by which
employee performance is defined, evaluated, and
rewarded.
• Effects of Organizational Rewards
– Higher-level performance-based rewards motivate
employees to work harder.
– Rewards help align employee self-interest with
organizational goals.
– Rewards foster increased retention and citizenship

• Merit Reward Systems
– Base a meaningful portion of individual
compensation on merit—the relative value of an
individual’s contributions to the organization.
• Employees who make greater contributions are given
higher pay than those who make lesser contributions.
• Incentive Reward Systems
– Concept: employee pay is based on employee
output.
– Assume that:
• Performance is under the control of the individual worker.
• The employee work at a single task continuously.
• Pay is tightly tied to performance (i.e., pay varies with
output).

• Incentive Reward Systems (cont’d)
– Incentive pay plans
• Piece-rate systems
• Sales commissions
– Other forms of incentives
• Non-monetary incentives (perks)
• Team and Group Incentive Reward Systems
– Gainsharing programs
– Scanlon Plan
– Employee stock ownership plans (ESOPs)

• Executive Compensation
– Standard forms of executive compensation
• Base salary
• Incentive pay (bonuses)
– Special forms of executive compensation
• Stock option plans
• Executive perks
– Criticism of executive compensation
• Excessively large compensation amounts
• Compensation not tied to overall performance of the
organization
• Earnings gap between executive pay and typical
employee pay

• New Approaches to Performance-Based
Rewards
– Leveraging the value of incentives
• Allowing individuals and groups in the organization to
have a say in how rewards are distributed.
– Getting increasingly innovative in incentive
programs:
• Offering stock options to all employees
• Individualizing the rewards available to individuals in
reward systems

Key Terms
• motivation
• content perspectives
• Maslow’s hierarchy of
needs
• ERG theory of
motivation
• two-factor theory of
motivation
• need for affiliation
• need for achievement
• need for power
• process perspectives
• expectancy theory
• effort-to-performance
expectancy
• outcomes
• valence
• equity theory
• avoidance
• positive reinforcement
• extinction
• variable-ratio schedule
• variable-interval
schedule
• participation

Key Terms
• behavior modification
(OB Mod)
• compressed work
schedule
• job sharing
• telecommuting
• merit pay plan
• reward system
• piece-rate incentive
plan
• gainsharing programs
• Scanlon plan
• stock option plan

Employee motivation 1

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