OCW042: Motivation Techniques in Practice

Behavior Modification

Modifying behavior through reinforcement and environmental stimuli can increase positive actions and decrease negative actions in the workplace.

Learning Objectives

Differentiate between the various stimuli managers use to create or reinforce certain types of behavior

Key Takeaways

Key Points

  • Behavior modification is a central concept in organizational behavior, pulling from a wide variety of multidisciplinary perspectives such as psychology and sociology.
  • An important concern for creating a business is the environment, which will actively modify behavior in a variety of ways. Being able to proactively predict how a given environment may impact behavior is a great opportunity.
  • Reinforcement, both positive and negative, can be created via incentives or the removal and avoidance of negative stimuli.
  • Punishments, such as demotions, are also used to avoid repeating undesirable past behaviors.

Key Terms

  • stimuli: An external force which generates a response or a reaction from something else
  • reinforcement: The process which enables behavior with desirable consequences to be repeated.

Identifying how to keep employees interested and motivated in their work is a substantial aspect of organizational behavior. This area of business is uniquely combined with psychology and sociology to create an understanding of how people behave at work, and why. As an overview, there are a few key concepts which will help to frame motivational theory, and how it is commonly applied in the workplace.

Environment Matters

How people behave is largely impacted by how they interact with the world around them. As an organization, it’s useful to consider how the structure of an office, and the availability of certain resources, may impact overall behavior of all employees. External forces that impact behavior are referred to as stimuli, and understanding what type of stimuli may modify behavior is useful in leading organizations.

Take an example of an open office environment, as compared to an environment of cubicles and individual offices. With easy access to privacy and walls between employees, tendencies toward individual work and decision-making via small groups and small meetings may be more likely compared to an office with long tables, no offices, and no walls. This is just a simple example of a cultural decision that will result in modified behavior.

Reinforcement (Positive and Negative)

Behavior modification in organizational management is often linked with B.F. Skinner’s contributions to the study of behavior. Reinforcement, both positive and negative, can be created via incentives or the removal and avoidance of negative stimuli. These influences on behavior are different than environmental influences because they are deliberately reactive to employee behaviors (as opposed to proactive or incidental). Hence the idea of reinforcing something deliberately, after it occurs.

Concepts like this tend to look much simpler in action than in theory. A simple example can be seen in the restaurant industry. A server might be motivated to perform better after receiving higher tips for exceptional service. This is positive reinforcement. On the other hand, a server might be motivated to perform better after his or her boss received negative feedback from an unhappy customer. This is negative reinforcement.


Punishments, such as demotions, are also used to avoid repeating undesirable past behaviors. For example, a restaurant manager might require the server who makes the most mistakes (such as mixing up orders) to pick up the least desirable shifts.

This is an excellent diagram, which quickly demonstrates the way in which operant conditioning via reinforcement (positive and negative) and punishment (positive and negative). In essence, behavior can be promoted or demoted through strategic use of positive and negative reinforcements, and positive and negative punishments.

Operant Conditioning: Behavior can be promoted or demoted through strategic use of positive and negative reinforcements, as well as positive and negative punishments.

Job Design

Designing jobs and job characteristics strategically to empower employee satisfaction and motivation is a central responsibility of management.

Learning Objectives

List the various core dimensions of strategic job design, along with the psychological states which accompany them

Key Takeaways

Key Points

  • Job design is the process of specifying the contents, objectives, responsibilities, and relationships the job will fulfill or interact with.
  • Clever job design can be a highly motivating aspect of an employee’s day-to-day operations. Effectively building motivation and satisfaction into the job design itself empowers positive employee behaviors.
  • Skill variety, task identity, task significance, autonomy, and feedback are core components of effective job design.
  • If effectively designed, a job should induce the psychological states of meaningfulness, responsibility, and ownership of the results.
  • Managers can also leverage intrinsic and extrinsic rewards, job rotation, job enrichment and job enlargement to better motivate employee’s via job design.

Key Terms

  • Autonomy: The ability to determine and enact one’s own objectives and processes in the workplace.

Job Design

Job design is an important prerequisite to effective workplace motivation, as designing a job effectively can empower positive behaviors and create a strong infrastructure for employee success. Job design is specifying the contents, responsibilities, objectives, and relationships required to satisfy the expectations of the role. Understanding how to effectively design a job is a key managerial skill, with various models and theories to assist in pursuing this tactfully.

Job Characteristic Theory

Proposed by Hackman & Oldman in 1976, this theory underlines five critical characteristics job design should keep in mind, which satisfy three critical psychological states of the employee filling the role. The objective of this model is to generate intrinsic motivation, satisfaction, and performance while minimizing turnover.

Core Job Dimensions

  1. Skill variety — Doing the same thing day in and day out gets tedious. The natural solution is designing jobs with enough variety to stimulate ongoing interest, growth, and satisfaction.
  2. Task identity — Being part of a team is motivating, but so too is having ownership of a facet of the process. Having a clear understanding of what one is responsible for, and some degree of control over said task, is motivating.
  3. Task significance — Being relevant to organizational success provides key motivation to completing the tasks at hand. Knowing one’s importance tends to lead to satisfaction.
  4. Autonomy — No one likes being micro-managed, and having some freedom to be the expert is critical to job satisfaction. Generally speaking, we hire individuals for their specialized knowledge. Giving specialists autonomy to make the right decisions is a win win.
  5. Feedback — Finally, everyone needs objective feedback as to how they are doing and how they can do better. Providing well-constructed feedback with tangible outcomes is a key component of job design.

Psychological States

  1. Experienced Meaningfulness – Through accomplishing the first three dimensions above, employees feel what they do is meaningful. This is a positive psychological state.
  2. Experienced Responsibility – Dimension four brings about a sense of accountability, which is motivating.
  3. Knowledge of Results – Dimension five provides a sense of progress, growth, and personal assessment. Understanding one’s accomplishments is a healthy state of mind for motivation and satisfaction.

Job Design Techniques

As a motivational force in the organization, managers must consider how they can design jobs tactfully to create empowered, motivated, and satisfied employees. Here are a few established methods to accomplish this objective:

  • Job Rotation – As noted in the above model, it’s not particularly motivating to do the exact same thing every day. As a result, rotating jobs and expanding the skill sets of employees accomplishes two objectives: increased employee satisfaction will and broader employee skill sets.
  • Job Enlargement (horizontal) – Zooming out a little, and granting employees the autonomy to assess the quality of their work, improve efficiency of their processes, and address mistakes often empowers satisfaction in the workplace.
  • Intrinsic and Extrinsic Rewards – Having autonomy is motivating, but particularly motivating when rewards are granted on the performance level. Consider a salesman. Receiving a commission on every sale motivates both performance and job satisfaction.
  • Job Enrichment (vertical) – As a manager, it is your responsibility to dedicate some (if not all) of your managerial planning to experienced employees as they grow into their roles. By giving over control of the employee’s work task planning to the employees themselves, they feel a strong sense of progress in their career and ownership of their outcomes.


Under flextime, workers are allowed to determine their work schedule instead of working during the standard hours of 9 a.m. to 5 p.m.

Learning Objectives

Evaluate flextime as an alternative work schedule

Key Takeaways

Key Points

  • Even with flextime, employees are usually expected to work during a core period of time during the working day depending on the needs of the business (from 11 a.m. to 3 p.m. for example).
  • Some companies have a flexplace policy which allows employees to decide where they do their work.
  • Flextime benefits for employees include: a better work-life balance, less commute, less fatigue, more days off, and lower sickness.
  • Flextime benefits for the company include: better motivated workers; more efficient and effective operation; less fatigued workers, so less errors; people work overtime hours without receiving overtime rates; fewer facilities required; and lower sickness.

Key Terms

  • flexitime: An arrangement that allows employees to set their own working hours within agreed limits; normally must include certain periods (core time) when they must be at work.
  • telecommuting: Telecommuting or telework are terms often used interchangeably to refer to a work arrangement in which employees enjoy flexibility in work location and hours. A person who telecommutes is known as a “telecommuter” and a person who teleworks is known as a “teleworker. ” Telecommute generally refers to the elimination of the daily commute to a central place of work. Many telecommuters work from home, while others, occasionally also referred to as “nomad workers” or “web commuters” utilize mobile telecommunications technology to work from coffee shops or other locations.
  • work-life balance: The relative importance of work and personal life to a particular individual.


Flexitime is a variable work schedule, in contrast to traditional work arrangements requiring employees to work a standard 9 a.m. to 5 p.m. day. Its invention is usually credited to William Henning. Under flextime, there is typically a core period (of approximately 50% of total working time / working day) of the day, when employees are expected to be at work (for example, between 11 a.m. and 3 p.m.). The rest of the working day is “flexitime”, in which employees can choose when they work, subject to achieving total daily, weekly, or monthly hours in the region of what the employer expects, and subject to the necessary work being done.


Telecommuting: This man is telecommuting from a restaurant. As a result of improvement in technology and Internet connectivity, one can telecommute from almost anywhere now.

A flextime policy allows staff to determine when they will work, while a flexplace policy allows staff to determine where they will work. Its practical realization can mainly be attributed to the entrepreneur Wilhelm Haller who founded Hengstler Gleitzeit, and later “Interflex Datensysteme GmbH” in Southern Germany, where today a number of companies offer Flexitime (Gleitzeit) solutions which have grown out of his initiative.

Advantages of Flextime

The advantages of flexitime for the individual include: better work-life balance, less commute, less fatigue, more days off, and lower sickness. The benefits for the company include: better motivated workers; more efficient and effective operation; less fatigued workers, so less errors; people work overtime hours without receiving overtime rates; fewer facilities required; and lower sickness.

For employers, flexitime can aid the recruitment and retention of staff. It has been a particularly popular option in 2009 for employers trying to reduce staff costs without having to make redundancies during the recession. It can also help provide staff cover outside normal working hours and reduce the need for overtime. Flexitime can also improve the provision of equal opportunities to staff unable to work standard hours. Flexitime can give employees greater freedom to organize their working lives to suit personal needs. In addition, travelling can be cheaper and easier if it is out of peak time.

A recent review by the Cochrane Collaboration has found that flexible working arrangements, such as flextime and telecommuting can have positive effects on health, but the effects are primarily seen when employees have some control over their new schedules. Additionally, individuals who telecommute to work most of the work week are more satisfied with their jobs than are traditional employees who commute into a physical office location.

Cross-Training and Job Sharing

Cross training involves workers being trained in tangent job functions, while job sharing involves two people working together on the same job.

Learning Objectives

Explain cross-training and job training

Key Takeaways

Key Points

  • Cross training involves workers being trained in tangent job functions to increase oversight in ways that are impossible through management interactions with workers alone; it also empowers them to be more effective.
  • Job sharing is an employment arrangement where typically two people are retained on a part time or reduced time basis to perform a job normally fulfilled by one person working full time.
  • There are challenges associated with making job sharing work, but studies show that net productivity increases when two people share the same 40-hour job.

Key Terms

  • job sharing: Job sharing is an employment arrangement where typically two people are retained on a part-time or reduced-time basis to perform a job normally fulfilled by one person working full-time.
  • Cross-training: Cross-training in business operations involves training employees to engage in quality control measures. Employees are trained in tangent job functions to increase oversight in ways that are impossible through management interactions with workers alone.
  • featherbedding: The employment of more workers than is necessary because of union rules, especially upon the introduction of new technology
  • job specification: the criteria required to be filled by an employee

Cross-Training and Job Sharing

What is Cross-training ?

Cross-training in business operations involves training employees to engage in quality control measures. Employees are trained in tangent job functions to increase oversight in ways that are impossible through management interactions with workers alone.


Workers working together on an assembly line: Workers on an assembly line, who normally do a single task, benefit from cross-training to develop their skills and be able to work on a variety of areas.


The advantages of cross-training employees include the following:

  • Helps customers and clients by empowering employees to answer questions about the entire organization
  • Illuminates inefficient methods, outdated techniques, and bureaucratic drift, which allows staff to re-evaluate the work methods
  • Raises awareness of how other departments operate
  • Enhances routine scheduling and enables staff to move around the tasks of the operation
  • Better coverage, increased flexibility, and the ability to cope with unexpected absences, emergencies, and illnesses
  • Increases the employability of staff who have the opportunity to train in areas outside of their original responsibilities

There are other, more general advantages as well:

  • Increased flexibility and versatility
  • Appreciated intellectual capital
  • Improved individual efficiency
  • Increased standardization of jobs
  • Heightened morale

Job Sharing

Job sharing is an employment arrangement where typically two people are retained on a part time or reduced time basis to perform a job normally fulfilled by one person working full time. Compensation is apportioned between the workers, thus leading to a net reduction in per employee income. Job sharing should not be confused with the more pejorative term featherbedding, which describes the deliberate retention of excess workers on a payroll. For employees seeking more free time, job sharing may be a way to take back more control of their personal lives. Employees who job share frequently attribute their decision to quality of life issues. Studies have shown that net productivity increases when two people share the same 40-hour job.

However, there is an inherent challenge in making job sharing work for the rest of the company’s stakeholders. The hand-off or handover communication between those sharing the job is essential, and co workers must adapt to working with each other. For example, one person is responsible for a task on Monday, but another performs it on Tuesday.

Working from Home

Innovations in technology have allowed for telecommuting, a practice in which employees work from home or on the go.

Learning Objectives

Evaluate the advantages and disadvantages to telecommuting

Key Takeaways

Key Points

  • The terms ” telecommuting ” and “telework” are both used to describe a work arrangement in which employees have the flexibility to choose their work location and hours.
  • Communities, employers, employees, and the environment receive benefits from telecommuting.
  • The disadvantages of telecommuting include a possible negative impact on career advancement and workplace communication issues.
  • Entrepreneurs can choose to run a business from home for a variety of reasons, such as lower business expenses, personal health limitations, and a more flexible schedule due to the lack of a commute.
  • Work-at-home parents may have decided to start a home-based business due ot the incompatibility of a 9-5 work day with school hours or sick days.

Key Terms

  • virtual office: A virtual office is a combination of off-site live communication and address services that allow users to reduce traditional office costs while maintaining business professionalism. Frequently the term is confused with “office business centers” or “executive suites” which demand a conventional lease whereas a true virtual office does not require that expense.
  • telecommute: To work from home, sometimes for part of a working day or week, using a computer connected to one’s employer’s network or via the Internet.

Advantages of Telecommuting

Telecommuting refers to a work arrangement in which employees enjoy flexibility in work location and hours. With modern telecommunication technology, no longer is it necessary for employees to undergo a daily commute to a central place of work. Many telecommuters work from home, while others, who are occasionally referred to as “nomad workers” or “web commuters”, work from coffee shops or other locations.

To be successful, telecommuting should incorporate training and development that includes evaluation, simulation programs, team meetings, written materials, and forums. Information sharing should be considered synchronous in a virtual office and building processes to handle conflicts should be developed. Operational and administrative support should be redesigned to support the virtual office environment. Facilities need to be coordinated properly in order to support the virtual office and technical support should be coordinated properly.

Telecommuting offers benefits to communities, employers, and employees. For communities, telecommuting can offer fuller employment by increasing the employability of circumstantially marginalized groups, such as work at home parents and caregivers, the disabled, retirees, and people living in remote areas. Furthermore, working from home reduces traffic congestion and traffic accidents, relieves the strain on transportation infrastructures, reduces greenhouse gases, saves fuel, and reduces energy use.

For companies, telecommuting and work-from-home arrangements may:

  • Expand the talent pool
  • Reduce the spread of illness
  • Reduce costs
  • Increase productivity
  • Reduce their carbon footprint and energy usage
  • Reduce turnover and absenteeism
  • Improve employee morale
  • Offer a continuity of operations strategy
  • And improve their ability to handle business across multiple timezones

For individuals, telecommuting improves work-life balance. Working from home can free up the equivalent of 15 to 25 workdays a year from time that would have otherwise been spent commuting, and save between $4,000 and $21,000 per year in travel and work-related costs.

Environmental Benefits and Government Regulation

Telecommuting gained more ground in the United States in 1996 after the Clean Air Act amendments were adopted. The act required companies with over 100 employees to encourage car pools, public transportation, shortened workweeks, and telecommuting. In 2004, an appropriations bill was enacted by Congress to encourage telecommuting for certain Federal agencies. The bill threatened to withhold money from agencies that failed to provide telecommuting options to all eligible employees. The energy-saving potential of telecommuting from gas savings alone would total more than twice what the U.S. currently produces from all renewable energy sources combined.

Employee Motivation and Satisfaction

Work-from-home flexibility is a desirable asset for employees. A meta-analysis of 46 studies on telecommuting by Ravi Gajendran and David A. Harrison found that telecommuting has largely positive benefits for employees and employers, mainly relating to job satisfaction, autonomy, stress, manager -rated job performance, and work-family conflict. The meta-analysis found generally no detrimental effects on the quality of workplace relationships and career outcomes. Only high-intensity telecommuting (where employees work from home for more than 2.5 days a week) was found to harm employee relationships with coworkers, but this was found to be offset by beneficial effects on work-family conflict.

Potential Drawbacks and Concerns

Telecommuting has come to be viewed by some as more a complement rather than a substitute for work in the workplace. Barriers to continued growth of telecommuting include distrust from employers and personal disconnectedness for employees. Traditional line managers are accustomed to managing by observation and not necessarily by results. This causes a serious obstacle in organizations attempting to adopt telecommuting. The main concern about telecommuting is the fear of loss of control. While 75% of managers say they trust their employees, a third say they’d like to be able to see them, just to be sure.

Managers may view the teleworker as experiencing a drop in productivity during the first few months. This drop occurs as the employee, his peers, and the manager adjust to the new work regimen. The drop could also be accountable to an inadequate office setup. Managers should be patient and give the teleworker time to adapt. Eventually, productivity of the teleworker should climb, as over two-thirds of employers report increased productivity among telecommuters.

From an employee perspective, some believe that telecommuting can negatively affect one’s career. A recent survey of 1,300 executives from 71 countries indicated a belief that people who work from home are less likely to get promoted. The reasoning is that companies rarely promote people into leadership roles who haven’t been consistently seen and measured.

Home-Based Business

Another category of people who work from home are those who have a home-based business. Entrepreneurs choose to run businesses from home for a variety of reasons, including lower business expenses, personal health limitations, and a more flexible schedule due to the lack of a commute. This flexibility can give an entrepreneur more options when planning tasks, especially parenting duties.

Employee Responsibility

Employees are often empowered and motivated by responsibility, autonomy, and participation in setting their own objectives.

Learning Objectives

Realize the intrinsic motivational value of collaborating with employees to set objectives and delegate responsibility

Key Takeaways

Key Points

  • Accountability and responsibility in the workplace are positively correlated with higher levels of employee motivation.
  • Maslow’s Hierarchy of Needs supports this premise, identifying the intrinsic value of self-fulfillment and self-esteem derived from autonomy and responsibility.
  • Edwin Locke’s goal theory identifies value in shared goal-setting, and suggests increased responsibility and employee involvement results in higher levels of motivation.
  • When deriving shared goals, it is critical to recognize why a given task is relevant to the big picture, how it can be accomplished, and what the objectives themselves will be.

Key Terms

  • accountability: Responsible or answerable for; ownership of the consequences.

Employee motivation is a complex concept, and what is effective for one employee may or may not be effective for another. However, it has been observed that many employees respond positively to increases in responsibility and accountability from a motivational perspective. Employee participation, intrinsic rewards, Locke’s goal theory, and Maslow’s Hierarchy of Needs are all useful perspectives in understanding why employee responsibility correlates positively with motivation.

Why Responsibility Motivates

As the concept of responsibility and its application to motivation is qualitative, it is useful to explore a variety of motivational theories relevant to the impact of responsibility.

Employee Participation

Employees recognize that responsibility and accountability are displays of trust, and an increase in employee participation in strategic decision-making and tactical thinking builds confidence and enables buy-in when decisions are made. Various studies of employee participation in process improvement discussions demonstrate that when employees are consulted and involved in making important operational decisions, they feel shared responsibility for the outcomes of those decisions. This shared responsibility drives positive performance, as they are now accountable not only for the execution but for the concept itself.

Maslow’s Hierarchy of Needs

A commonly cited example of motivational theory, Maslow’s Hierarchy of Needs essentially stipulates that fulfilling lower levels needs (such as food, hygiene, shelter, safety, etc.) is generally accomplished through salary and benefits. However, these hygiene factors don’t result in higher level motivation and higher level thinking. Social affiliation, belonging, a sense of self-respect, a feeling that what one does is meaningful, accountability, and finally self-actualization are identified as the more powerful and higher level motivators. From this perspective, empowering employee responsibility fulfills critical needs in terms of self-esteem (the fourth level of the hierarchy) and, to some degree, self actualization (the fifth level).

Maslow's Hierarchy of Needs underlines the importance of upper level motivators and the fulfillment of intrinsic needs as employees develop into roles of responsibility.

Maslow’s Hierarchy Of Needs: Maslow’s Hierarchy of Needs underlines the importance of upper level motivators and the fulfillment of intrinsic needs as employees develop into roles of responsibility.

Locke’s Goal Theory

Edwin A. Locke put forward the relatively simple concept that setting specific goals at the appropriate difficultly level will empower higher degrees of performance. What’s interesting here is that when employees themselves are involved in the goal-setting process, when they feel responsibility for the objectives they themselves helped to determine, the level of motivation is higher. This implies that shared responsibility in goal-setting has a positive impact on overall motivation.

How to Delegate Responsibility

With this motivational theory in mind, it is a relatively safe assumption that many employees will be more motivated when given responsibility of their tasks. Managers must understand how much responsibility can be delegated to a given employee, and how that responsibility should be handed over. Making an employee accountable for a task or tactic they don’t agree with, for example, could have disastrous results (as the intrinsic motivators may not be present). Managers must know how to hand off responsibility responsibly.

  • What are the objectives? When providing an employee with responsibility over a project, task, or process, managers and/or leaders should clearly underline what the objectives are and how success will be determined. The employee must know not only what it is they will be working on, but what the expectations and end goals of that task will be. This should be an open discussion, where agreement and alignment is created before moving forward.
  • How will the objectives be accomplished? Following this, the employee must be given a say in how this process will be approached. Employees are functional experts in the fields they are hired for, and thus will almost always have strong opinions on best practices and overall process. Managers should actively listen to how the employee suggests pursuing a given task, and provide suggestions and feedback to ensure the employee is moving in the right direction relative to the long term strategy of the organization. Agreement on “the how” is important before moving forward.
  • Why this is relevant? Finally, being accountable for a process requires time and energy. Understanding why the task is critical for organizational success is critical for employee empowerment and motivation.

Once all of these concepts are agreed upon, the employee is ready to take on the responsibility for the task at hand. This managerial strategy empowers employees to grow and take responsibility for their actions, ultimately developing more leaders at the organization.

Employee Ownership

Various business and compensation models focus on empowering employee ownership in pursuit of a higher level of commitment and motivation.

Learning Objectives

Understand the ways to enable employee ownership

Key Takeaways

Key Points

  • Organizations have a variety of methods, from cooperative structures to stock options, to empower employee motivation by providing employees with ownership of the organization or its processes.
  • Ownership motivates both intrinsically and extrinsically. Intrinsically, ownership creates a sense of shared vision and accountability. Extrinsically, ownership provides employees with a share of the profits.
  • Stock options, coops, franchises, and commission are common examples of compensation and/or structural strategies that enable employees to have some ownership of the company.
  • Vroom’s expectancy theory and social cognitive theory both support the concept of employee ownership as a potential source of motivation.

Key Terms

  • Commission: A percentage fee for the salesman on the sale of a product or service.
  • autonomy: The ability to function independently; the freedom to make independent decisions.

Why Ownership Motivates

Various business models and compensation models cater to the concept that employee ownership is a highly valuable approach to generate employee motivation. Through providing employees a stake in the company, be it through shares of stock, variable income models, or through partnerships or coops, each employee will have a direct stake in the financial and operational success of the organization.

As an extrinsic motivator, the simple capital returns of ownership will play a role in empowering employee commitment. As a direct recipient of some share of the profit, the employee will recognize a direct correlation between their efforts and their returns. From an intrinsic point of view, employees who feel a sense of ownership of the organization will similarly feel the accountability, pride, and fulfillment that comes from growing that business into a successful venture. Considering the strong sense of intrinsic and extrinsic incentives attainable through employee ownership, it functions as an excellent motivator.

How to Empower Ownership

As mentioned above, there are a number of models and reward mechanisms that can create a sense of ownership. Some of the more common methods include:

  • Commission – Consider a car salesman. The employee contract stipulates that any sale of a vehicle will result in a total bonus of 20% of the overall profit on that vehicle or 2% of the sales price (whichever is higher). This salesman now has a direct stake in the organization’s revenues, and is motivated to contribute to the bottom line due to an extrinsic reward (the commission).
  • Coop – A more extreme example would be a coop. Coops function off of the basic principles of shared ownership, which makes them an ideal example for this discussion. In a coop, every employee has an equal stake in the company, assuming both equal risk and equal reward. In a way, every single individual within the coop is an owner of the organization itself, and intrinsically and extrinsically motivated to optimize performance and achieve the best results.
  • Franchise – Another interesting form of ownership is a franchise. Franchising is essentially the process of a parent organization selling the rights to a given brand and product line to an external owner (usually in another region or country). The frachisee will have complete ownership of their own branch of the organization, and thus will have a strong incentive to succeed.
  • Stock Options – Perhaps the simplest and most common example of shared ownership would be stock options. Many publicly traded organizations offer stock options to some or all of their employees. All this means is that some employees get a small percentage of financial ownership of the company (usually quite small). When the company performs well, it is likely that the stock price will increase and the shares each employee holds will appreciate in value. This can be seen a motivator.

Theoretical Support

Vroom’s Expectancy Theory

One useful motivational model from psychology is Vroom’s expectancy theory. Under this perspective, motivation is derived through the pursuit of expected and desired outcomes. At its simplest, this theory assumes that there is a certain amount of effort an employee will exert. This expression of effort will anticipate a certain degree of performance. That degree of performance will result in a desired outcome. The value of that desired outcome for the employee must be relevant. Combining all of this, employees exert energy to perform under the assumption that they will achievement objectives which result in a desirable outcome.

Social Cognitive Theory

Bandura’s social cognitive theory functions on the premise of self-efficacy. This simply means that there is a strong correlation between an employee’s feeling of autonomy and capacity to achieve results, and their overall level of motivation and performance. Employees who feel both capable of a task, and who have ownership of the outcomes of that task (i.e. rewards, be they intrinsic or extrinsic), will be more likely to perform well.

Source: Business