11.1: Management and Motivation

11.1.1: Introduction to Motivation

Motivation is a term that refers to the process that elicits, controls, and sustains certain behaviors.

Learning Objective

Discuss the relevance of motivation to the workplace

Key Points

Conceptually, motivation should not be confused with either volition or optimism. Motivation is related to, but distinct from, emotion.
Studies have found that employees are not motivated solely by money but motivation is linked to employee behavior and their attitudes.
At one time, employees were considered just another input into the production of goods and services, but this changed after the Hawthorne studies.

Key Terms

motivation: Willingness of action, especially in behavior.
volition: The mental power or ability of choosing; the will.

Motivation is a term that refers to a process that elicits, controls, and sustains certain behaviors. It is a group phenomenon which affects the nature of an individual’s behavior, the strength of the behavior, and the persistence of the behavior. For instance: an individual has not eaten, so he or she feels hungry, and as a response he or she eats and diminishes feelings of hunger.

There are many approaches to motivation: physiological, behavioral, cognitive, and social. It is the crucial element in setting and attaining goals—and research shows you can influence your own levels of motivation and self-control. According to various theories, motivation may be rooted in a basic need to minimize physical pain and maximize pleasure; or it may include specific needs such as eating and resting; or a desired object, goal, state of being, or ideal; or it may be attributed to less-apparent reasons such as altruism, selfishness, morality, or avoiding mortality. Conceptually, motivation should not be confused with either volition or optimism. Motivation is related to, but distinct from, emotion.

At one time, employees were considered just another input into the production of goods and services. But this changed after the Hawthorne studies. The Hawthorne studies were conducted by Elton Mayo at Hawthorne Plant in the 1920s. The researchers were studying the effect of different working environments on productivity. They used lighting as an experimental variable (the effect of bright lighting and dull lighting). Initially they noticed that employees were working harder but it was not because of the lighting. They concluded that productivity increased due to attention that the workers got from the research team and not because of changes to the experimental variable . The Hawthorne studies found that employees are not motivated solely by money but motivation is linked to employee behavior and their attitudes. The Hawthorne Studies began the human relations approach to management, so the needs and motivation of employees became the primary focus of managers.

Carrot and Stick

Motivation theories often use the metaphor of a carrot dangling from a stick to describe how people are motivated to achieve goals.

11.1.2: Classical Theory of Motivation

The classical theory of motivation includes the hierarchy of needs from Abraham Maslow and the two-factor theory from Frederick Herzberg.

Learning Objective

Compare Maslow’s and Herzberg’s theories of the hierarchy of needs

Key Points

A good manager will try to figure out which levels of needs are important for a certain individual or employee.
Maslow’s Hierarchy of Needs consist of the following: Physiology (hunger, thirst, sleep, etc. ); Safety/Security/Shelter/Health; Belongingness/Love/Friendship; Self-esteem/Recognition/Achievement; Self actualization.
Frederick Herzberg’s two-factor theory, a.k.a. intrinsic/extrinsic motivation, concludes that certain factors in the workplace result in job satisfaction but, if absent, they don’t lead to dissatisfaction but rather to no satisfaction at all.

Key Term

demotivation: Feeling or state of being unmotivated or demotivated.

Needs Hierarchy Theory

The content of this theory includes the hierarchy of needs from Abraham H. Maslow and the two-factor theory from Frederick Irving Herzberg. Maslow’s theory is one of the most widely discussed theories of motivation .

History of Motivation

Maslow’s theory is one of the most widely discussed theories of motivation.

The American motivation psychologist Abraham H. Maslow developed the Hierarchy of Needs consistent of five hierarchical classes. It shows the complexity of human requirements. According to him, people are motivated by unsatisfied needs. The lower level needs such as physiological and safety needs will have to be satisfied before higher level needs are to be addressed. We can relate Maslow’s Hierarchy of Needs theory with employee motivation. For example, if a manager is trying to motivate his employees by satisfying their needs, according to Maslow, he should try to satisfy the lower-level needs before he tries to satisfy the upper-level needs or the employees will not be motivated. Also the manager has to remember that not everyone will be satisfied by the same needs.

A good manager will try to figure out which levels of needs are active for a certain individual or employee. The basic requirements build the first step in his pyramid. If there is any deficit on this level, the whole behavior of an individual will be oriented to satisfy this deficit. Subsequently we do have the second level, which awakens a need for security. Basically it is oriented on a future need for security. After securing those two levels, the motives shift in the social sphere, which form the third stage. Psychological requirements comprise the fourth level, while the top of the hierarchy is self-realization. So the theory can be summarized as follows: Human beings have wants and desires which influence their behavior.

Only unsatisfied needs influence behavior; satisfied needs do not. Since needs are many, they are arranged in order of importance, from the basic to the complex. The person advances to the next level of needs only after the lower-level need is at least minimally satisfied. The further the progress up the hierarchy, the more individuality, humanness and psychological health a person will show. The needs, listed from basic (lowest or earliest) to most complex (highest or latest) are as follows:

Physiology (hunger, thirst, sleep, etc. )
Safety/Security/Shelter/Health
Belongingness/Love/Friendship
Self-esteem/Recognition/Achievement
Self actualization

Herzberg’s Two-factor Theory

Frederick Herzberg’s two-factor theory, a.k.a. intrinsic/extrinsic motivation, concludes that certain factors in the workplace result in job satisfaction, but if absent, they don’t lead to dissatisfaction but rather to no satisfaction at all. The factors that motivate people can change over their lifetime, but “respect for me as a person” is one of the top motivating factors at any stage of life. He distinguished between: Motivators (e.g. challenging work, recognition, responsibility) which give positive satisfaction, and Hygiene factors (e.g. status, job security, salary and fringe benefits) that do not motivate when present but, if absent, result in demotivation. The name Hygiene factors is used because, like hygiene, the presence will not make you healthier, but absence can cause health deterioration. The theory is sometimes called the “Motivator-Hygiene Theory” or “The Dual Structure Theory. ” Herzberg’s theory has found application in such occupational fields as information systems and in studies of user satisfaction.

11.1.3: Frederick Taylor

Scientific management, also called Taylorism, concerns the analysis and synthesis of workflows to improve productivity.

Learning Objective

Explain Taylorism: the theory of scientific management

Key Points

It can be said that the quality of life at work extends to life outside of work. This can be evaluated by comparing the wages of the “expert leaders” to those of “general laborers”.
Taylor proposed a “neat, understandable world in the factory, an organization of men whose acts would be planned, coordinated, and controlled under continuous expert direction”.
Factory production was to become a matter of efficient and scientific management—the planning and administration of workers and machines alike as components of one big machine.

Key Term

workflow: A process and/or procedure in which tasks are completed. It may be defined with a flowchart to define actors, actions, results, decisions, and action paths.

Scientific management, also called Taylorism, is a theory of management that analyzed and synthesized workflows. Its main objective was improving economic efficiency, especially labor productivity. It was one of the earliest attempts to apply science to the engineering of processes and to management. Its development began with Frederick Winslow Taylor in the 1880s and 1890s within the manufacturing industries. Its peak of influence came in the 1910s, but by the 1920s, its influence started to dwindle. The 1920s saw the beginning of an era of competition and syncretism with opposing or complementary ideas.

Frederick Taylor

Scientific management, also called Taylorism, is a theory of management that analyzed and synthesized workflows.

Although scientific management as a distinct theory or school of thought was obsolete by the 1930s, most of its themes are still important parts of industrial engineering and management today. These include analysis; synthesis; logic; rationality; empiricism; work ethic; efficiency and elimination of waste; standardization of best practices; disdain for tradition preserved merely for its own sake or merely to protect the social status of particular workers with particular skill sets; the transformation of craft production into mass production; and knowledge transfer between workers and from workers into tools, processes, and documentation.

Features of Scientific Management

Social philosophy, a promise of reform through growth and expansion
Application of engineering principles to the industrial system of the production
Time and motion studies to ensure efficiency
Standarization
Factory work to be planned, coordinated, and controlled under expert direction
Information centralized/controlled in planning department, which increases potential for survillance and controlling the production process
Expert directions by engineers, factory planning, time and motion studies, standardization, and the intensive division of labors

Taylor proposed a “neat, understandable world in the factory, an organization of men whose acts would be planned, coordinated, and controlled under continuous expert direction. ” Factory production was to become a matter of efficient and scientific management—the planning and administration of workers and machines alike as components of one big machine.

11.1.4: Elton Mayo

George Elton Mayo concluded that people’s work performance is dependent on both social issues and job content.

Learning Objective

Analyze Elton Mayo’s theories on motivation and management

Key Points

The human relations movement refers to the researchers of organizational development who study the behavior of people in groups, particularly workplaces.
The movement viewed workers in terms of their psychology and fit with companies rather than as interchangeable parts, and it resulted in the creation of the discipline of human resource management.
Norms of cooperation and higher output were established because of a feeling of importance, physical conditions or financial incentives had little motivational value.

Key Term

human resource management: The process of hiring and developing employees so that they become more valuable to the organization.

The human relations movement refers to the researchers of organizational development who study the behavior of people in groups, in particular workplace groups. It originated in the 1930s’ Hawthorne Studies, which examined the effects of social relations, motivation, and employee satisfaction on factory productivity. The movement viewed workers in terms of their psychology and fit with companies rather than as interchangeable parts, and it resulted in the creation of the discipline of human resource management.

George Elton Mayo is known as the founder of the Human Relations Movement and was known for his research, including the Hawthorne Studies and his book, The Human Problems of an Industrialized Civilization (1933). The research he conducted under the Hawthorne Studies of the 1930s showed the importance of groups in affecting the behavior of individuals at work. Mayo’s employees, Roethlisberger and Dickson, conducted the practical experiments. This enabled Mayo to make certain deductions about how managers should behave. He carried out a number of investigations to look at ways of improving productivity—for example, by changing lighting conditions in the workplace. What he found, however, was that work satisfaction depended to a large extent on the informal social pattern of the work group. Where norms of cooperation and higher output were established because of a feeling of importance, physical conditions or financial incentives had little motivational value. People will form work groups, and this can be used by management to benefit the organization. In short, he concluded that people’s work performance is dependent on both social issues and job content. He suggested a tension between workers’ “logic of sentiment” and managers’ “logic of cost and efficiency” which could lead to conflict within organizations.

Motivation

Motivation makes for courageous decisions.

George Elton Mayo stressed the importance of natural groups, in which social aspects take precedence over functional organizational structures. He also encouraged upwards communication, by which communication is two-way, from worker to chief executive, as well as vice versa. Companies need their employees to be able to successfully communicate and convey information, to be able to interpret others’ emotions, to be open to others’ feelings, and to be able to solve conflicts and arrive at resolutions. By acquiring these skills, the employees, those in management positions, and the customer can maintain more compatible relationships. Cohesive and good leadership is needed to communicate goals and to ensure effective and coherent decision making. It has become a concern of many companies to improve the job-oriented interpersonal skills of employees. The teaching of these skills to employees is referred to as “soft skills” training.

Criticisms

Elton Mayo’s work is considered the counterpoint of Taylorism and scientific management by various academics. Taylorism, founded by F. W. Taylor, sought to apply science to the management of employees in the workplace in order to gain economic efficiency through labor productivity. On the other hand, Elton Mayo’s work has been widely attributed to the discovery of the “social person,” thereby allowing for workers to be seen as individuals rather than merely robots designed to work for unethical and unrealistic productivity expectations. However, this theory has been contested, as Mayo’s purported role in the human relations movement has been questioned. Nonetheless, although Taylorism attempted to justify scientific management as a holistic philosophy rather than a set of principles, the human relations movement worked parallel to the notion of scientific management aiming to address the social welfare needs of workers and therefore elicit their co-operation as a workforce.

11.1.5: The Hawthorne Effect

The Hawthorne effect refers to a series of studies starting in 1924 at the Hawthorne Works concerning productivity.

Learning Objective

Apply the Hawthorne effect to business organizations

Key Points

Changing a variable usually increased productivity, even if the variable was just a change back to the original condition.
The central idea behind the Hawthorne effect is that changes in the behavior of participants during the course of a study may be related only to the special social situation and social treatment that they received.
Output was measured mechanically by counting how many finished relays each worker dropped down a chute.

Key Term

illumination: The act of illuminating, or supplying with light; the state of being illuminated.

The Hawthorne Effect

The central idea behind the Hawthorne effect, a term used as early as 1950 by John R. P. French, is that changes in the behavior of participants during the course of a study may be “related only to the special social situation and social treatment they received. ” The term gets its name from a factory called the Hawthorne Works, where a series of experiments on factory workers was carried out between 1924 and 1932 . This effect was observed for minute increases in illumination.

The Last Vestige of the Hawthorne Works Plant in Cicero, Illinois

The term Hawthorne effect was applied in reference to a set of studies begun in 1924 at the former Hawthorne Works plant.

Evaluation of the Hawthorne effect continues in the present day. Most industrial and occupational psychology and organizational behavior textbooks refer to the illumination studies. Only occasionally are the rest of the studies mentioned. In the lighting studies, light intensity was altered to examine its effect on worker productivity. In one of the studies, experimenters chose two women as test subjects and asked them to choose four other workers to join the test group. Together the women worked in a separate room over the course of five years (1927–1932) assembling telephone relays. Output was measured mechanically by counting how many finished relays each worker dropped down a chute. This measuring began in secret two weeks before moving the women to an experiment room and continued throughout the study.

Relay Assembly Experiments

In the experiment room, they had a supervisor who discussed changes with them and at times used their suggestions. Then the researchers spent five years measuring how different variables impacted individual and group productivity. Some of the variables were: giving two five-minute breaks (after a discussion with them on the best length of time), and then changing to two ten-minute breaks (not their preference). Productivity increased, but when they received six five-minute rests, they disliked it and reduced output.

Providing food during the breaks shortened the day by 30 minutes (output went up), while shortening it more increased the output per hour, but decreased overall output. Changing a variable usually increased productivity, even if the variable was just a change back to the original condition. However, it is said that this is the natural process of the human being to adapt to the environment without knowing the objective of the experiment occurring. Researchers concluded that the workers worked harder because they thought that they were being monitored individually. Researchers hypothesized that choosing one’s own coworkers, working as a group, being treated as special (as evidenced by working in a separate room), and having a sympathetic supervisor were the real reasons for the productivity increase.

One interpretation, mainly due to Elton Mayo, was that “the six individuals became a team and the team gave itself wholeheartedly and spontaneously to cooperation in the experiment. ” (There was a second relay assembly test room study whose results were not as significant as the first experiment. )

Bank Wiring Room Experiments

The purpose of the next study was to find out how payment incentives would affect productivity. The surprising result was that productivity actually decreased. Workers apparently had become suspicious that their productivity may have been boosted to justify firing some of the workers later on. The study was conducted by Elton Mayo and W. Lloyd Warner between 1931 and 1932 on a group of fourteen men who put together telephone switching equipment. The researchers found that although the workers were paid according to individual productivity, productivity decreased because the men were afraid that the company would lower the base rate. Detailed observation between the men revealed the existence of informal groups or “cliques” within the formal groups. These cliques developed informal rules of behavior as well as mechanisms to enforce them. The cliques served to control group members and to manage bosses; when bosses asked questions, clique members gave the same responses, even if they were untrue. These results show that workers were more responsive to the social force of their peer groups than to the control and incentives of management.

11.2: Theories of Motivation

11.2.1: Maslow’s Hierarchy of Needs

Maslow’s hierarchy of needs are a series of physiological and emotional requirements for human contentment, arranged in order of necessity.

Learning Objective

Explain Maslow’s hierarchy of needs

Key Points

Maslow’s hierarchy of needs is often portrayed in the shape of a pyramid, with the greatest and most fundamental levels of needs at the bottom, and the need for self-actualization at the top.
The order of needs as categorized by Maslow are physiological; safety; love and belonging; esteem; and self-actualization.
Maslow acknowledged that many different levels of motivation are likely to be present in a human all at once. His focus in discussing the hierarchy was to identify the basic types of motivation and the order that they generally progress as lower needs are reasonably well met.

Key Terms

esteem: to regard someone with respect.
security: The condition of not being threatened, especially physically, psychologically, emotionally, or financially.
potential: currently unrealized ability.

Examples

For the most part, physiological needs are obvious – they are the literal requirements for human survival. If these requirements are not met, the human body simply cannot continue to function. Air, water, and food are metabolic requirements for survival in all animals, including humans. Clothing and shelter provide necessary protection from the elements. The intensity of the human sexual instinct is shaped more by sexual competition than maintaining a birth rate adequate to survival of the species.
With their physical needs relatively satisfied, the individual’s safety needs take precedence and dominate behavior. In the absence of physical safety – due to war, natural disaster, or, in cases of family violence, childhood abuse, etc. – people (re-)experience post-traumatic stress disorder and trans-generational trauma transfer. In the absence of economic safety – due to economic crisis and lack of work opportunities – these safety needs manifest themselves in such things as a preference for job security, grievance procedures for protecting the individual from unilateral authority, savings accounts, insurance policies, reasonable disability accommodations, and the like. This level is more likely to be found in children because they have a greater need to feel safe.
After physiological and safety needs are fulfilled, the third layer of human needs are interpersonal and involve feelings of belongingness. The need is especially strong in childhood and can over-ride the need for safety as witnessed in children who cling to abusive parents. Deficiencies with respect to this aspect of Maslow’s hierarchy – due to hospitalism, neglect, shunning, ostracism etc. – can impact individual’s ability to form and maintain emotionally significant relationships in general.
All humans have a need to be respected and to have self-esteem and self-respect. Esteem presents the normal human desire to be accepted and valued by others. People need to engage themselves to gain recognition and have an activity or activities that give the person a sense of contribution, to feel self-valued, be it in a profession or hobby. Imbalances at this level can result in low self-esteem or an inferiority complex.
The perceived need for self-actualization pertains to what a person’s full potential is and realizing that potential. Maslow describes this desire as the desire to become more and more what one is, to become everything that one is capable of becoming. For example one individual may have the strong desire to become an ideal parent, in another it may be expressed athletically, and in another it may be expressed in painting, pictures, or inventions.

The most fundamental and basic needs are what Maslow called “deficiency needs” or “d-needs”:

Esteem
Friendship and love
Security
Physical needs

If these “deficiency needs” are not met, the body gives no physical indication but the individual feels anxious and tense. Maslow’s theory suggests that the most basic level of needs must be met before the individual will focus on higher level needs.

Maslow’s Hierarchy of Needs

Maslow’s hierarchy captures the varying degree of needs by which humans are motivated. According to the psychological perspective, decision makers are motivated by these needs and decisions are influenced accordingly.

The human mind is so complex that separate motivations from different levels of Maslow’s pyramid usually occur at the same time. Maslow referred to these levels and their satisfaction in terms such as “relative,” “general,” and “primarily.” His focus in establishing the hierarchy of needs was to identify the basic types of motivations and the order in which that they generally progress as lower needs are reasonably well met.

Physiological Needs

Physiological needs are generally obvious because they are requiremed for survival. If requirements are not met, the body cannot continue to function. People lacking food, love, esteem, or safety would consider food to be their greatest need. Air, water, food, clothing, and shelter are the basic physiological needs.

Safety Needs

Once physical needs are satisfied, individual safety takes precedence. Safety and Security needs include:

Personal security
Financial security
Health and well-being
Safety net against accidents/illness and their adverse impacts
Love and belonging

Interpersonal Needs

After physiological and safety needs are fulfilled, the third layer of human needs are interpersonal. This involves feelings of belongingness. Deficiencies in interpersonal needs, due to neglect, shunning, ostracism, etc., can impact an individual’s ability to form and maintain emotionally significant relationships in general, such as:

Friendship
Intimacy
Family

Humans need to feel a sense of belonging and acceptance, whether it comes from a large social group, such as clubs, religious groups, professional organizations, gangs, family, or mentors. Humans need to love and be loved (sexually and non-sexually) by others. Without these connections, many people become susceptible to loneliness, social anxiety, and clinical depression. This need for belonging can sometimes overcome physiological and security needs. For example, an anorexic may ignore the need to eat and the security of health for a feeling of control and belonging.

Esteem

Esteem represents the normal human desire to be accepted and valued by others. People need to engage themselves to gain recognition and have an activity or activities that give the person a sense of contribution, to feel self-valued, be it in a profession or hobby. Imbalances at this level can result in low self-esteem or an inferiority complex. Many people with low self-esteem will not be able to improve their view of themselves simply by receiving fame, respect, and glory externally, but must first accept themselves internally. Psychological imbalances, such as depression, can prevent one from obtaining self-esteem on both levels.

Maslow noted two versions of esteem needs: a “lower” version and a “higher” version. The “lower” version of esteem is the need for respect from others. This may include a need for status, recognition, fame, prestige, and attention. The “higher” version manifests itself as the need for self-respect. For example, the person may have a need for strength, competence, mastery, self-confidence , independence, and freedom. This “higher” version takes precedence over the “lower” version because it relies on an inner competence established through experience. Deprivation of these needs may lead to an inferiority complex, weakness, and helplessness.

Maslow also states that even though these are examples of how the quest for knowledge is separate from basic needs, he warns that these “two hierarchies are interrelated rather than sharply separated. ” This means that this level of need, as well as the next and highest level, are not strict, separate levels but closely related to others, and this is possibly the reason that these two levels of need are left out of most textbooks.

Self-actualization

“What a man can be, he must be. ” This quotation forms the basis of the perceived need for self-actualization. This level of need refers to what a person’s full potential is and the realization of that potential. Maslow describes this level as the desire to accomplish everything that one can, to become the most that one can be. Individuals may perceive or focus on this need very specifically. For example, one individual may have the strong desire to become an ideal parent. In another, the desire may be expressed athletically. For others, it may be expressed in paintings, pictures, or inventions. As previously mentioned, Maslow believed that to understand this level of need, the person must not only achieve the previous needs, but master them.

11.2.2: Herzberg’s Two-Factor Theory

The Two-factor theory indicates that one set of factors at work cause job satisfaction, while another set of factors cause dissatisfaction.

Learning Objective

Explain Herzberg’s two factor theory

Key Points

Factor 1: Motivators such as challenging work and recognition give positive satisfaction created by the job’s intrinsic conditions. Factor 2: Hygiene factors such as status, job security and salary do not themselves create positive satisfaction, but their absence can cause dissatisfaction.
Individuals look for the gratification of higher-level psychological needs associated with achievement, recognition, responsibility, and advancement, rather than the satisfaction of lower-order needs such as minimum salary levels or safe and pleasant working conditions.
If management wants to increase satisfaction on the job, it should be concerned with the nature of the work itself. On the other hand, if management wishes to reduce dissatisfaction, then it must focus on improving the job environment.

Key Terms

productivity: Productivity is a measure of the efficiency of production and is defined as total output per one unit of a total input.
Need Hierarchy: Abraham Maslow’s theory created in 1943 that postulates that needs can be categorized into the following 5 categories which are the basis for human motivations: Physiological, Safety, Belongingness and Love, Esteem, and Self-Actualization
motivate: To provide someone with an incentive to do something; to encourage.

Example

To motivate employees management must enrich the content of the actual work they ask them to do. For example, building into tasks set a greater level of responsibility, and the opportunity to learn new skills. In advocating making work more interesting, and improving the quality of the work experience for the individual, Herzberg coined the phrase ‘Quality of Working Life’.

The Two-factor theory (also known as Herzberg’s motivation-hygiene theory and Dual-Factor Theory) states that certain factors in the workplace cause job satisfaction, while a separate set of factors cause dissatisfaction. It was developed by Frederick Herzberg, a psychologist, who theorized that job satisfaction and job dissatisfaction act independently of each other.

Fundamentals of the Theory

Attitudes and their connection with industrial mental health are related to Maslow’s theory of motivation. According to Herzberg, individuals are not content with the satisfaction of lower-order needs at work such as minimum salary levels or safe and pleasant working conditions. Rather, individuals look for the gratification of higher-level psychological needs having to do with achievement, recognition, responsibility, advancement, and the nature of the work itself. This appears to parallel Maslow’s theory of a need hierarchy.

Maslow’s hierarchy

However, Herzberg added a new dimension to this theory by proposing a two-factor model of motivation, based on the notion that the presence of one set of job characteristics or incentives leads to worker satisfaction at work, while another and separate set of job characteristics leads to dissatisfaction at work. Thus, satisfaction and dissatisfaction are not on a continuum with one increasing as the other diminishes, but are independent phenomena.

This theory suggests that to improve job attitudes and productivity, administrators must recognize and attend to both sets of characteristics and not assume that an increase in satisfaction leads to decrease in unpleasurable dissatisfaction.

Herzberg found that the job characteristics related to what an individual does (the nature of the work he performs) apparently have the capacity to gratify such needs as achievement, competency, status, personal worth, and self-realization, thus making him happy and satisfied. However, the absence of such gratifying job characteristics does not appear to lead to unhappiness and dissatisfaction. Instead, dissatisfaction results from unfavorable assessments of such job-related factors as company policies, supervision, technical problems, salary, interpersonal relations on the job, and working conditions.

Thus, if management wishes to increase satisfaction on the job, it should be concerned with the nature of the work itself—the opportunities it presents for gaining status, assuming responsibility, and for achieving self-realization. If, on the other hand, management wishes to reduce dissatisfaction, then it must focus on the job environment—policies, procedures, supervision, and working conditions. If management is equally concerned with both satisfaction and dissatisfaction, then managers must give attention to both sets of job factors.

Theory Development

The two-factor theory was developed from data collected by Herzberg from interviews with 203 American accountants and engineers in Pittsburgh, chosen because of their professions’ growing importance in the business world. The subjects were asked to relate times when they felt exceptionally good or bad about their present job or any previous job, and to provide reasons, and a description of the sequence of events giving rise to that positive or negative feeling.

The two-factor theory distinguishes between:

Motivators (e.g. challenging work, recognition, responsibility) that give positive satisfaction, arising from intrinsic conditions of the job itself, such as recognition, achievement, or personal growth .
Hygiene factors (e.g. status, job security, salary, fringe benefits, work conditions) that do not give positive satisfaction, though dissatisfaction results from their absence. These are extrinsic to the work itself, and include aspects such as company policies, supervisory practices, or wages/salary.

Essentially, motivation factors are needed to motivate an employee to higher performance. Hygiene factors are needed to ensure an employee is not dissatisfied. Herzberg also further classified our actions and how and why we do them. For example, if you perform a work related action because you have to, then that is classed as movement, but if you perform a work related action because you want to, then that is classed as motivation.

Implications of Herzberg’s Theory

Herzberg’s theory attempts to uncover psychological needs of employees and enhance employee satisfaction. In order to apply this theory, employers are encouraged to design jobs that enhance and motivate employees beyond simply meeting a daily or weekly quota. This theory highlights the importance of rewards systems and monitoring when and how employees are rewarded. Herzberg’s theory implies that simple recognition is often enough to motivate employees and increase job satisfaction.

Herzberg argues that both motivation and hygiene are equally important, but that good hygiene will only lead to average performance, preventing dissatisfaction, but not, by itself, create a positive attitude or motivation to work. To motivate the employee, management must enrich the content of the actual work they ask them to do.

11.2.3: MacGregor’s Theory X and Theory Y

Theory X and Theory Y describe two contrasting models of workforce motivation applied by managers in human resource management, organizational behavior, organizational communication, and organizational development.

Learning Objective

Differentiate between the motivators in Theory X and the motivators in Theory Y

Key Points

Theory X and Theory Y, put forward by Douglas McGregor, describe two contrasting models of workforce motivation and management.
Theory X is a much more traditional management style, predicated on the assumption that external rewards, punishments, and supervision are effective ways to manage employees.
Theory Y focuses on the internal mechanisms of motivation (relative to the employee), assuming that employees have a natural drive to contribute, take ownership of their work, and pursue organizational objectives on their own.
While Theory Y may seem optimal, it does have some drawbacks. Through empowering everyone towards autonomy, it can be easy to lose organizational alignment. Strong organizational objectives and processes are necessary in order for it to work.
There is some balance to be achieved between these two perspectives, though Theory Y motivators tend to be the preferably approach to building strong collaborative cultures.

Among the many theories of motivation is Douglas McGregor’s concept of Theory X and Theory Y. His initial work focused on demonstrating two contrasting motivators in the workplace: external motivators such as supervision, rewards, penalties, and rules (X) versus internal motivators such as passion, job satisfaction, accountability, and feelings of self-worth (Y).

The true value in creating this contrast is understanding the situations where X or Y may work better, and recognizing that motivation is both internally and externally complex. To draw something of a parallel here, Maslow’s hierarchy has some loose alignment with McGregor’s theories, wherein the lower levels of the hierarchy are more along ‘X’ lines while the higher levels have more of a ‘Y’ feel to them.

Theory X

The core assumption here is that, in a given workplace environment, employees won’t have the intrinsic motivations required to accomplish objectives. Instead, a system should be in place where external motivators create desired behavioral outcomes. This is considered more of a firm managerial approach, where management will set objectives, supervise execution, and provide corresponding returns.

This can be implemented in two ways. Employees can be externally motivated by the existence of supervision or punishment or externally motivated by the absence of supervision or punishment.

In the first scenario, supervision is tight, and rewards are positive for strong performance and negative for bad performance. In this method, authoritarian management pushes employees toward desired outcomes. Workplaces like this focus on shaping their employees into what they want them to be. The latter scenario represents a softer approach that reduces animosity and anxiety.

Theory Y

Theory Y is a bit more complex, as the manager is not entirely in control (and thus, feels less like a management style). However, properly understanding Theory Y concepts can help managers manage and hire better.

Theory Y assumes that employees enjoy a challenge, and strive to add value for the sake of self-worth and a desire to contribute to a community. The focal point here is on building strong, friendly relationships between management and employees, and removing most (if not all) authority from the arrangement. In such a situation, there is no push and no push back, simply unclouded business objectives.

This, in theory, sounds ideal. However, managers and employees who work in this framework do eventually encounter some challenges. Through a hands off management approach, it can be easy to lose alignment, as different individuals go in slightly different tactical directions. It can also result in enabling less motivated employees to take advantage of a relaxed work environment. There are various ways to address these concerns, though, such as building organizational processes to create alignment and through hiring carefully.

Theory X and Theory Y

This image demonstrates where the true source of motivation is derived in each theory. Under Theory X, management uses control to direct behavior. Under Theory Y, behavior is dictated by the employees themselves through communication with management and an understanding of the agreed upon broader strategy and objectives.

This image demonstrates where the true source of motivation is derived in each theory. Under Theory X, management uses control to direct behavior. Under Theory Y, behavior is dictated by employees through communication with management and an understanding of the agreed upon broader strategy and objectives.

Using Both

No model is perfect, and every circumstance requires some individual thought. Most often, experienced managers will find the need to use both at some point, though Theory Y usually leads to preferable outcomes and company culture. Some employees require different sources of motivations depending on where they are in their own personal development, not to mention some tasks seems to work out better when externally driven, while others work better when internally driven. Having comfort with both concepts is the ideal tool set for a motivational manager.

11.2.4: Ouchi’s Theory Z

Ouchi’s theory focuses on increasing employee loyalty to the company by providing a job for life and focusing on the employee’s well-being.

Learning Objective

Explain how the Ouchi Theory promotes a strong work force

Key Points

Theory Z is a name applied to three distinctly different psychological theories, one of which was was developed by Dr. William Ouchi.
According to Ouchi, Theory Z management tends to promote stable employment, high productivity, and high employee morale and satisfaction.
William Ouchi takes Japanese business techniques and adapts them to the American corporate environment.
One of the most important pieces of this theory is that management must have a high degree of confidence in its workers in order for this type of participative management to work.

Key Terms

turnover: In a human resources context, turnover or staff turnover or labor turnover is the rate at which an employer gains and loses employees.
morale: The capacity of people to maintain belief in an institution or a goal, or even in oneself and others.

Introduction

Theory Z is a name applied to three distinct psychological theories. One was developed by Abraham H. Maslow in his paper Theory Z and the other is Dr. William Ouchi’s so-called “Japanese Management” style popularized during the Asian economic boom of the 1980s. The third was developed by W. J. Reddin in Managerial Effectiveness.

For Ouchi, Theory Z focused on increasing employee loyalty to the company by providing a job for life with a strong focus on the well-being of the employee, both on and off the job. According to Ouchi, Theory Z management tends to promote:

Stable employment
High productivity
High employee morale and satisfaction

History of Ouchi’s Theory

Professor Ouchi spent years researching Japanese companies and examining American companies using the Theory Z management styles .

Toyota: A Product of Japanese Productivity

Professor Ouchi spent years researching Japanese companies using the Theory Z management styes.

By the 1980s, Japan was known for the highest productivity anywhere in the world, while America’s productivity had fallen drastically. The word “Wa” in Japanese can be applied to Theory Z because they both deal with promoting partnerships and group work.

The word “Wa” means a perfect circle or harmony, which influences Japanese society to always come to a solution via teamwork. Promoting Theory Z and the Japanese word “Wa” is how the Japanese economy became so powerful. Because the Japanese show a high level enthusiasm to work, some of the researchers also claim that the “Z” in the Theory Z stands for “Zeal. “

Ouchi’s Conclusions

Ouchi wrote a book called Theory Z: How American Business Can Meet the Japanese Challenge (1981). In this book, Ouchi shows how American corporations can meet the Japanese challenges with a highly effective management style that promises to transform business in the 1980s.

The secret to Japanese success, according to Ouchi, is not technology, but a special way of managing people. “This is a managing style that focuses on a strong company philosophy, a distinct corporate culture, long-range staff development, and consensus decision-making” (Ouchi, 1981). Ouchi claims that the results show:

Lower turnover
Increased job commitment
Dramatically higher productivity

William Ouchi doesn’t say that the Japanese culture for business is necessarily the best strategy for the American companies. Instead, he takes Japanese business techniques and adapts them to the American corporate environment.

Much like McGregor’s theories, Ouchi’s Theory Z makes certain assumptions about workers. Some of the assumptions about workers under this theory include:

Workers tend to want to build happy and intimate working relationships with those that they work for and with, as well as the people that work for them.
Workers have a high need to be supported by the company, and highly value a working environment in which such things as family, cultures and traditions, and social institutions are regarded as equally important as the work itself. These types of workers have a very well developed sense of order, discipline, a moral obligation to work hard, and a sense of cohesion with their fellow workers.
Workers can be trusted to do their jobs to their utmost ability, so long as management can be trusted to support them and look out for their well-being (Massie & Douglas, 1992).

One of the most important pieces of this theory is that management must have a high degree of confidence in its workers in order for this type of participative management to work. This theory assumes that workers will be participating in the decisions of the company to a great degree.

Ouchi explains that the employees must be very knowledgeable about the various issues of the company, as well as possess the competence to make those decisions. He also points out, however, that management sometimes has a tendency to underestimate the ability of the workers to effectively contribute to the decision-making process (Bittel, 1989). For this reason, Theory Z stresses the need for the workers to become generalists, rather than specialists, and to increase their knowledge of the company and its processes through job rotations and constant training.

Promotions tend to be slower in this type of setting, as workers are given a much longer opportunity to receive training and more time to learn the ins and outs of the company’s operations.

The desire, under this theory, is to develop a work force, which has more loyalty toward staying with the company for an entire career. It is expected that once employees do rise to a position of high level management, they will know a great deal more about the company and how it operates, and will be able to use Theory Z management theories effectively on the newer employees.

11.3: Modern Views on Motivation

11.3.1: Equity Theory

Equity theory states that perceptions of equality in the input/outcome ratio of employees determines their relative job satisfaction.

Learning Objective

Explain equity theory

Key Points

Equity theory was developed in 1963 by John Stacey Adams, who stated that an employee will consider himself to be fairly treated if the ratio of his inputs to outcomes is equivalent to those around him (by his perception).
Inputs include effort, time, loyalty, seniority, commitment, personal sacrifice, etc. Outcomes, on the other hand, include salary, benefits, job security, reputation, sense of achievement, gratitude, etc.
According to equity theory, the person who gets “too much” and the person who gets “too little” both feel distressed. The person who gets too much may feel guilt or shame. The person who gets too little may feel angry or humiliated.
(1) Individuals try to maximize outcomes
(2) [a] Groups will evolve systems of equity, and induce members to adhere to these systems
[b] Groups will reward those who treat others equitably, and punish those who don’t.
(3) Individuals in an inequitable relationship feel ‘distressed’. Those who get too little feel angry/humiliated, while those with too much feel guilt or shame.
(4) Those in distress will attempt to eliminate the inequity, in order to eliminate the distress.
3 Primary assumptions:
(1) Employees except a fair return for their contribution
(2) Employees can and do determine what an equitable return should be by comparing themselves to coworkers
(3) Distressed employees attempt to fix an inequitable situation by distorting inputs and outcomes in their own minds, by actually changing inputs/outcomes, or by leaving the organization.
Implications of Equity Theory:
– The value of inputs and outcomes will vary from person to person
– Employees may adjust outcomes according to purchasing power and local market conditions
– An overcompensated employee may adjust their efforts, or may inflate the value of their inputs in their mind, adopting a sense of superiority and thus decrease their efforts.
Criticisms:
– Some say the model is too simple; there are other variables that affect people’s perceptions of fairness which vary from person to person
– Much theory related to Equity Theory has been conducted in laboratories and not real world settings

Key Terms

equity theory: an attempt to explain relational satisfaction in terms of perceptions of fair or unfair distributions of resources within interpersonal relationships
Inputs: Each participant’s contributions that are viewed as entitling him/her to rewards or costs. Examples include time, effort, and loyalty.
outcomes: The positive and negative consequences that an individual perceives to be a result of his/her actions. Examples include praise, bonuses, and promotions.
ratio: The relative magnitudes of two quantities (usually expressed as a quotient).

Example

Consider two employees doing the same job, and putting in the same inputs (say, time and effort). If employee X gets a raise and employee Y does not, then the latter may feel unfairly treated, diminishing his job satisfaction and possibly quality of work.

Equity theory was first developed in 1963 by John Stacey Adams, a workplace and behavioral psychologist, who asserted that employees seek to maintain equity between the inputs that they bring to a job and the outcomes that they receive from it, against the perceived inputs and outcomes of others.

For example, if an employee was given a salary increase but a peer was given a larger salary increase for the same amount of work, the first employee would evaluate this change, perceive an inequality, and be distressed. However, if the first employee perceived the other employee being given more responsibility and therefore relatively more work along with the salary increase, then the first employee may evaluate the change, conclude that there was no loss in equality status, and not resist the change.

An individual will consider that he is treated fairly if he perceives the ratio of his inputs to his outcomes to be equivalent to those around him .

Formula expressing equal equity theory

Ratio of one individual’s outputs to inputs is perceived as equal to that of another individual in comparison.

Defining Inputs & Outcomes

Inputs are defined as each participant’s contributions to the relational exchange and are viewed as entitling him/her to rewards or costs. The inputs that a participant contributes to a relationship can be either assets (entitling him/her to rewards) or liabilities(entitling him/her to costs). Individual traits such as boorishness and cruelty are seen as liabilities entitling the possessor to costs. Inputs typically include:

Time
Effort
Loyalty
Commitment
Adaptability
Flexibility
Tolerance
Determination
Enthusiasm
Personal sacrifice
Support from coworkers and colleagues
Skill

Outcomes are defined as the positive and negative consequences that an individual perceives a participant has incurred as a consequence of his/her relationship with another. When the ratio of inputs to outcomes is close, then the employee should be very satisfied with their job. Outcomes can be both tangible and intangible.

Typical outcomes include:

Job security
Salary
Expenses
Recognition
Responsibility
Sense of achievement
Praise

Four Propositions of Equity Theory

Individuals will try to maximize their outcomes.
A) Individuals can maximize collective rewards by evolving accepted systems for equitably apportioning resources among members. Thus, groups will evolve such systems of equity, and will attempt to induce members to accept and adhere to these systems. B) Groups will generally reward members who treat others equitably and generally punish members who treat each other inequitably.
When individuals find themselves participating in inequitable relationships, they will become distressed. The more inequitable the relationship, the more distress they will feel. According to equity theory, the person who gets “too much” and the person who gets “too little” both feel distressed. The person who gets too much may feel guilt or shame. The person who gets too little may feel angry or humiliated.
Individuals who discover they are in inequitable relationships will attempt to eliminate their distress by restoring equity.

Three Primary Equity Theory Assumptions Applied to Most Businesses

Employees expect a fair return for what they contribute to their jobs, a concept referred to as the “equity norm.”
Employees determine what their equitable return should be after comparing their inputs and outcomes with those of their coworkers, a concept referred to as “social comparison.”
Employees who perceive themselves as being in an inequitable situation will seek to reduce the inequity either by distorting inputs and/or outcomes in their own minds, by directly altering inputs and/or outcomes, or by leaving the organization.

Implications for Managers

Equity theory has several implications for business managers:

People measure the totals of their inputs and outcomes. This means a working mother may accept lower monetary compensation in return for more flexible working hours.
Different employees ascribe personal values to inputs and outcomes. Thus, two employees of equal experience and qualification performing the same work for the same pay may have quite different perceptions of the fairness of the deal.
Employees are able to adjust for purchasing power and local market conditions. Thus a teacher from Alberta may accept lower compensation than his colleague in Toronto if his cost of living is different, while a teacher in a remote African village may accept a totally different pay structure.
Although it may be acceptable for more senior staff to receive higher compensation, there are limits to the balance of the scales of equity and employees can find excessive executive pay demotivating.
Staff perceptions of inputs and outcomes of themselves and others may be incorrect, and perceptions need to be managed effectively.

11.3.2: Expectancy Theory

Expectancy Theory postulates that an individual’s motivation can be derived through identifying an appropriate expectation.

Learning Objective

Understand the three relationships and four variables that result in Expectancy Theory

Key Points

Victor Vroom at the Yale School of Management put forward a concept called Expectancy Theory, which suggests behavior is motivated by an anticipated outcome.
There are three interactions: expectancy (effort → performance), instrumentality (performance → outcome), and valence (outcome → reward).
Expectancy allows an individual to move from effort to performance, and is predicated upon the belief that one can accomplish a given goal.
Instrumentality is confidence that a given performance will result in the desired reward. This is best enabled through an established relationship or contract that guarantees the reward.
Valence is the degree to which this reward matters to the individual being motivated, which could be pictured as a spectrum. The higher the valence, the higher the motivation.

Key Terms

self-efficacy: One’s belief that he or she can accomplish a given objective.
valence: A value assigned to an object, behavior, or other consequence that has relative scale.

Expectancy Theory, initially put forward by Victor Vroom at the Yale School of Management, suggests that behavior is motivated by the anticipated result or consequences expected. The concept of choice is central to this theory, as there are a variety of behaviors that an individual could potentially choose. To anticipate what choice will be made , identify what consequences would be expected as an outcome, and select the motivation which will result in the optimal outcome.

The Building Blocks

Expectancy Theory boils down to a few simple variables, which in conjunction produce the projected outcome based upon the motivational inputs. This is described as three relationships using four inputs:

Expectancy: effort → performance (E→P)
Instrumentality: performance → outcome (P→O)
Valence: V(R) outcome → reward

What you’ll notice is a full equation, where each variable leads to the next:

Effort (E) → Performance (P) → Outcome (O) → Reward (R)

Expectancy Theory

This illustration visually expresses the three relationships that ultimately equate to a given motivation.

This illustration visually expresses the three relationships which ultimately equate to a given motivation.

Expectancy

Moving from effort to performance requires three things. First is self-efficacy, or the belief that one can accomplish the goal. Second is the appropriate goal difficulty. Third is the perception of control, the concept that accomplishing the objectives is within one’s influence.

Instrumentality

To move from performance to outcome, the individual must trust that the delivery of a given output will result in the desired reward. An example of this could be a commission on a sale. Established policies in place, preferably via a contract, will guarantee the reward will be delivered based upon an agreed upon performance.

Valence

This is simply the valuation of a given reward from the individual being motivated. This can be intrinsically positive or negative, which is to say the pursuit of OR avoidance of an outcome. This is why it is called a valence. Based upon the values, desires, and objectives of an individual, the individual will have a certain valued reaction to the reward. If one reward has a more extreme valence than another, it will consequently result in a higher level of motivation.

Expectancy Theory combines these three concepts into the conclusion that these three interactions will ultimately create a desired motivational response.

11.3.3: Goal-Setting Theory

If done correctly, having more specific and well-enumerated goals lead to higher performance and a greater chance of achieving those goals.

Learning Objective

Explain the procedures and outcomes of goal setting

Key Points

According to the theory, goal setting affects outcomes in four ways: choice (focus on goal-relevant activities); effort (an enumerated target can raise effort); persistence (goals focus employees to work through setbacks); and cognition (change inefficient behaviors).
Goal-setting helps managers: since managers cannot consistently drive motivation and monitor employee activities, goal setting can work as a self-regulatory mechanism for employees to work with less guidance and oversight.
Do not encourage employees to “do their best. ” Instead, specific goals should be set, that are both challenging as well as realistic. It is best if these goals are set after deliberation with the employee in question.
For employees to care about goals that are set, six interdependent factors need to be considered: importance of the expected outcomes to the employee; self efficacy; commitment to others; goal feedback; task complexity; and goal motivation.
Feedback is particularly important, in order to sustain motivation and commitment, as well as to ensure that efforts are correctly guided.
It is important that the goals of a manager align with the goals of the organization as a whole. Another limitation is that rigorous goal setting may hamper complex and creative tasks, as individuals become preoccupied with meeting the goals rather than performing tasks.
Locke and Latham (2002) urge managers not to encourage employees to “do their best”. They state that this attitude is useless in eliciting specific behavior. Instead, specific goals should be set, which are both challenging as well as realistic. It is best if these goals are set after deliberation with the employee in question.
For employees to care about goals that are set, 6 interdependent factors need to be considered: Importance of the expected outcomes to the employee, Self Efficacy, Commitment to others, Goal feedback, Task complexity, Goal Motivation.
Feedback is particularly important, in order to sustain motivation and commitment, as well as to ensure that efforts are correctly guided.
Goal setting has limitations. It is important that the goals of a manager – and of specific individuals – align with the goals of the organization as a whole. If goals are not aligned, performance may suffer. Another limitation is that rigorous goal setting may hamper complex tasks, as individuals become preoccupied with meeting the goals rather than performing tasks. This may also be true with particularly creative work, where setting rigorous goals may hamper the creative process.

Key Terms

goal: a result that one is attempting to achieve
self-efficacy: the measure of the belief in one’s own ability to complete tasks and reach goals
cognitive: the part of mental function that deals with logic, as opposed to affective which deals with emotions

Example

Goals are often set at the start of a period, with evaluation at the end of that period. For example, sales personnel may be tasked with selling a certain number of units per quarter (e.g. a car salesman may have a goal to sell one car a week).

Goal Setting Theory

Setting goals affects outcomes in four ways:

Choice: Goals direct efforts towards goal-relevant activities and away from distractions.
Effort: Goals can lead to more effort; for example, if one typically produces four widgets an hour, and has the goal of producing six, one may work more efficiently as a result.
Persistence: People become more likely to work through setbacks if pursuing a goal.
Cognition: Goals can lead individuals to develop and change their behavior.

Goals that are difficult to achieve and specific tend to increase performance more than goals that are not. A goal can become more specific through quantification or enumeration (should be measurable), such as by demanding “…increase productivity by 50%,” or by defining certain tasks that must be completed.

Goal-Setting Theory

Goals lead to higher performance in an organization.

Psychologists have examined the behavioral effects of goal-setting, concluding in 90% of laboratory and field studies that specific and challenging goals led to higher performance than when the goals were easy or did not exists.

While some managers believe it is sufficient to urge employees to “do their best,” psychologists have disagreed on this style’s effectiveness. Some psychologists have found that people who are told to “do their best” don’t. To elicit some specific form of behavior from others, it is important that all employees have a clear understanding what is expected. “Doing their best” does not provide that clear measure. A goal is important because it establishes a specified direction and measure of performance.

However, when goals are established at a management level and thereafter solely laid down, employee motivation with regard to achieving these goals is rather suppressed. To increase motivation, employees must be involved in the goal setting process and the goals must be challenging as well.

People perform better when they are committed to achieve certain goals. Goal commitment is dependent on:

Importance of the expected outcomes of goal attainment
Self-efficacy – one’s belief that he is able to achieve the goals
Commitment to others – promises or engagements to others can strongly improve commitment
Feedback – keep track of performance to allow employees to see how effective they have been in attaining the goals to ensure that any deficiencies are quickly corrected.
Task complexity – more difficult goals require more cognitive strategies and well-developed skills. The more difficult the tasks, the smaller the group of people who possess the necessary skills and strategies. From an organizational perspective it is thereby more difficult to successfully attain more difficult goals since resources become more scarce.
Employee motivation – the more employees are motivated, the more they are stimulated and interested in accepting goals.

These success factors are interdependent. For example the expected outcomes of goals are positively influenced when employees are involved in the goal setting process. Not only does participation increase commitment in attaining the goals that are set, participation influences self-efficacy as well.

Goal-commitment, the most influential moderator, becomes especially important when dealing with difficult or complex goals. If people lack commitment to goals, they lack motivation to reach them. To commit to a goal, one must believe in its importance or significance.

The enhancement of performance through goals requires feedback. Goal setting and feedback go hand in hand. Without feedback, goal setting is unlikely to work. Providing feedback on short-term objectives helps to sustain motivation and commitment to a goal. Besides, feedback should be provided on the strategies followed to achieve the goals and the final outcomes achieved as well. Feedback on strategies to obtain goals is very important, especially for complex work, because challenging goals put focus on outcomes rather than on performance strategies, so they impair performance.

Proper feedback is also very essential, and the following hints may help for providing a good feedback:

Create a positive context for feedback.
Use constructive and positive language.
Focus on behaviors and strategies.
Tailor feedback to the needs of the individual worker.
Make feedback a two-way communication process.

Goal-setting may have little effect if individuals can’t see the state of their performance in relation to the goal. By gauging their performance, individuals can determine whether they need to work harder or changing their methods.

Goal-setting theory has limitations. In an organization, a goal of a manager may not align with the goals of the organization as a whole. In such cases, the goals of an individual may come into direct conflict with the employing organization. Without aligning goals between the organization and the individual, performance may suffer. Moreover, for complex or creative tasks, goal-setting may actual impair performance because the individual may become preoccupied with meeting goals and not performing tasks.

11.3.4: Reinforcement Theory

Reinforcement theory, or operant conditioning, is a implementation of cause and effect thinking into workplace motivation.

Learning Objective

Recognize the role of cause and effect via reinforcement in motivating good performance

Key Points

B.F. Skinner originally founded the basic premise behind Reinforcement Theory, which is best described as cause and effect. When a behavior occurs, individuals associate the consequences with the behavior.
Reinforcement, be it positive or negative, increases a behavior. This is best done through rewards or the removal of frustrations.
Punishment, be it positive or negative, is designed to decrease a behavior. This is best done through providing an adverse response.
Various factors can influence the efficacy of reinforcement. Most notably, the size, immediacy, and need for a given reward (or level of avoidance for a given punishment).

Key Term

reinforcement: The process of repeating a behavior with desirable consequences.

The basic premise behind B.F. Skinner’s Theory of Reinforcement is both simple and intuitive: an individual’s behavior is a function of its consequences. Think of it as a simple cause and effect graph. Every behavior will be a cause that creates some sort of consequence as an effect. If I work hard today, I’ll make more money. If I make more money, I’m more likely to want to work hard. This creates behavioral reinforcement, where the desired behavior is enabled and promoted by the desired outcome from a behavior.

The Primary Inputs

This theory relies on four primary inputs or aspects of operant conditioning, generated from the external environment. These four inputs are positive reinforcement, negative reinforcement, positive punishment, and negative punishment. A fifth input could be described as extinction, which is a lack of reinforcement for a behavior that had previously been reinforced.

Operant Conditioning

This chart demonstrates the various facets of operant conditioning, which can be framed via reinforcement and punishment (both positive and negative for each).

Reinforcement

Positive reinforcement: When a behavior (and subsequent response) is rewarding, the frequency of that behavior will be increased. For example, if an employee identifies a new market opportunity that creates profit, an organization may give her a bonus. This will positively reinforce the desired behavior.

Negative reinforcement: When a desired behavior is responded to with the removal of something the individual doesn’t like, the behavior is reinforced. For example, an employee demonstrates a strong sense of work ethic and wraps up a few projects faster than expected. This employee happens to have a long commute. The manager tells the employee to go ahead and work from home for a few days, considering how much progress she has made. This is an example of removing a negative stimuli for reinforcing a behavior.

Punishment

Positive punishment: Conditioning at it’s simplest, punishment is simply identifying a negative behavior and providing an adverse stimuli to dissuade future instances. A simple example would be suspending an employee for inappropriate behavior.

Negative punishment: Similar to negative reinforcement, negative punishment revolves around removing something to condition a response. To use our previous example for negative reinforcement, an employee prefers to work at home. However, his performance has been suffering lately. A negative punishment would be to revoke the right to work at home until performance improves.

Factors Impacting Success

Reinforcement can be impacted by various factors:

Satiation – In short, the degree of need. If an employee is quite wealthy, for example, it may not be particularly helpful to offer a bonus.

Immediacy – The time between the desired behavior and the potential reinforcement will have impact on how significantly the reinforcement will be correlated with the behavior. To use the bonus example, if an employee does something great, don’t wait around to provide a bonus. Make sure it’s fresh in their minds; this helps associate the outcome cause with the effect.

Size – Of course, the scale of the reward or punishment has a big impact on the scale of the response. A bigger bonus means a bigger impact (to a degree, see the satiation aspect above).

11.4: Motivation Techniques in Practice

11.4.1: Behavior Modification

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

Learning Objective

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

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

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

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.

Punishment

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.

Operant Conditioning

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

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.

11.4.2: Job Design

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

Learning Objective

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

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 Term

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

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.
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.
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.
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.
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

Experienced Meaningfulness – Through accomplishing the first three dimensions above, employees feel what they do is meaningful. This is a positive psychological state.
Experienced Responsibility – Dimension four brings about a sense of accountability, which is motivating.
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.

11.4.3: Flextime

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 Objective

Evaluate flextime as an alternative work schedule

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

work-life balance: The relative importance of work and personal life to a particular individual.
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.
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.

Example

Flextime works well for parents when both parents work. A working mother might choose to work from Monday to Friday from 7 a.m. to 3 p.m. so that she can be home when the children return from school (or pick them up). Her husband may go to work later, to see the children off to school, and thus stay at work later.

Flextime

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.

11.4.4: 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 Objective

Explain cross-training and job training

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

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.
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.
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

Example

Mary and Susan job share. Mary works on Monday and Tuesday, and Susan occupies the same position on Thursday and Friday. Mary and Susan both work on Wednesday. This is when they update each other on the current status of the projects on which they collaborate.

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.

Advantages

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.

11.4.5: Working from Home

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

Learning Objective

Evaluate the advantages and disadvantages to telecommuting

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.

Example

Examples of large companies which began as a home-based business include Apple Computer, Hewlett-Packard, and Amazon.com.

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.

11.4.6: Employee Responsibility

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

Learning Objective

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

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 Term

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

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.

11.4.7: Employee Ownership

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

Learning Objective

Understand the ways to enable employee ownership

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

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

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.