Organizational Behavior

Notes
Sarthak Saxena

Motivation Theories

Content Theories Process Theories

Maslow’s Hierarchy of Needs Adam’s Equity Theory

Herzberg’s Two Factor Theory Vroom’s Expectancy Theory

Alderfer’s ERG Theory Bandura’s Self-Efficacy Theory

McClelland’s Three Needs Theory Skinner’s Reinforcement Theory

Locke Goal Setting Theory

Maslow’s Hierarchy of Needs

According to Maslow, human needs were arranged in the form of a hierarchy, with
physiological (survival) needs at the bottom, and the more creative and intellectually oriented
‘self-actualization’ needs at the top.

Maslow argued that survival needs must be satisfied before the individual can satisfy the higher
needs. The higher up the hierarchy, the more difficult it is to satisfy the needs associated with
that stage, because of the interpersonal and environmental barriers that inevitably frustrate us.

Higher needs become increasingly psychological and long-term rather than physiological and
short-term, as in the lower survival-related needs.
Herzberg’s Two Factor Theory

Herzberg's motivation-hygiene Theory argues that the two factors, motivation and hygiene, can
cause either employee satisfaction or dissatisfaction.

The theory comprises two factors: motivation and hygiene. Motivation factors, such as a sense
of achievement and responsibility, aim to inspire and engage employees. Hygiene factors, such
as salary and working conditions, are necessary for employees to maintain satisfaction in the
workplace.

The presence or absence of these factors can significantly impact employee motivation and
engagement, and different combinations of these factors can affect the employees' job
satisfaction level.
McClelland’s Three Needs Theory

American psychologist David McClelland developed his theory of needs, also called the
Achievement Theory of Motivation.

McClelland’s theory says that everyone is driven by one of three needs — achievement,
affiliation or power. Different people are motivated by different drivers, so understanding what
specifically motivates a person to complete a task can vastly improve the likelihood that they’ll
complete the assignment and do it well.

Achievement

The need for achievement means you’re motivated by completing tasks you set out for yourself
or that someone else sets out for you.

Affiliation

The need for affiliation means you’re motivated by your connections with others. Affiliation
motivates interpersonal relationships and emotional connections.

Power

The need for power means you’re motivated by authority and control. People motivated by
power seek positions and relationships in which they can demonstrate their leadership and be
the primary decision-maker.
Alderfer’s ERG Theory

ERG theory is an extension of Maslow’s hierarchy of needs, which Alderfer refined in line with
empirical research on motivation over seventeen years.

After concluding his research, Alderfer simplified Maslow’s five-level interpretation into a
three-level hierarchy.

He also stipulated three fundamental differences to Maslow’s model:

• Different levels of need could be pursued simultaneously, with no requirement for an

individual to start from the bottom of Maslow’s pyramid and work their way up.

• The order of needs were not fixed but instead varied from person to person.

• The ERG theory also noted that if a higher level need remained unfulfilled, the
individual could regress to a lower level need to increase satisfaction. This became
known as the frustration-regression principle.

In the context of employee motivation, Alderfer suggested the frustration-regression principle

negatively impacts motivation and personal growth.

As a result, the ERG theory has an important role to play in employee morale, productivity,
and predicting sources of workplace conflict.
Adam’s Equity Theory

Adams’ equity theory of motivation says that to be motivated, individuals need to perceive that
the rewards they receive for their contributions are fair, and these rewards are similar to those
received by their peers. If individuals perceive that their rewards are not fair, they will feel
distressed and try to change things to create a sense of fairness.
Vroom’s Expectancy Theory

Expectancy is the belief that increased effort will lead to increased performance i.e. if I work
harder than this will be better. This is affected by such things as:

1. Having the right resources available (e.g. raw materials, time)

2. Having the right skills to do the job

3. Having the necessary support to get the job done (e.g. supervisor support, or correct
information on the job)

Instrumentality is the belief that if you perform well that a valued outcome will be received.
The degree to which a first level outcome will lead to the second level outcome. i.e. if I do a
good job, there is something in it for me. This is affected by such things as:

1. Clear understanding of the relationship between performance and outcomes – e.g. the
rules of the reward ‘game’

2. Trust in the people who will take the decisions on who gets what outcome

3. Transparency of the process that decides who gets what outcome

Valence is the importance that the individual places upon the expected outcome. For the
valence to be positive, the person must prefer attaining the outcome to not attaining it. For
example, if someone is mainly motivated by money, he or she might not value offers of
additional time off.

Specifically, Vroom says that an individual’s motivation is affected by how much they value
any reward associated with an action (Valence), how much they believe that by putting effort
into something they will be able to generate good results (Expectancy) and how much they
believe that generating good results will result in a reward (Instrumentality).

It’s important to note that rewards could be intrinsic or extrinsic. Extrinsic motivations are
external things such as money and promotion. Intrinsic motivations are internal things such as
a sense of fulfilment and achievement.

Motivation is a function of valence, instrumentality and expectancy.

• Valence: How much they value the potential rewards associated with the specific
results or behaviours,

• Expectancy: How much they believe that their additional effort will help them achieve
the target results of behaviours, and

• Instrumentality: How much they believe the rewards will actually appear should they
achieve the desired outcomes or behaviours.
Bandura’s Self–Efficacy Theory

Experience

Experience refers to your past experience of completing similar tasks. This is the most
important factor in self-efficacy.

Vicarious Experience

You can develop self-efficacy vicariously by watching other people perform a task.

Social Persuasion

You can increase your self-efficacy if others give you encouragement that you can perform a
task. Likewise, your self-efficacy will decrease if you receive discouraging or disparaging
remarks about your ability to perform a task.

Physiological Feedback

When confronted with a task, you experience a sensation from your body. How you interpret
these signals will impact your self-efficacy.
 Perception

Common biases in decision-making

Hindsight Bias

This is the tendency of individuals to see past mistakes or occurrences as obvious. After the
event has occurred, individuals believe that they did or should have seen it coming. This is
important when evaluating others decisions.

Anchoring Effect

Anchoring is when someone attaches themselves to an initial bit of information. In decision-

making, it entails people placing too much emphasis on the single piece of information. This
can cause the decision maker to fail to consider other important information.

Framing Bias

Framing bias is an individual’s response to how a situation or decision is presented. This can
lead to individuals being deceived or manipulated by third parties.

Escalation of Commitment

This is a tendency of individuals to continue to follow what has proven to be a negative or

unproductive course of action. Also known as the sunk cost fallacy or sunk cost bias, because
the tendency is motivated by an unwillingness to admit that they are wrong or accept that
resources are lost or wasted (they may be able to recover the investment).

Immediate Gratification

This is the tendency to make the immediacy of a potential solution to a problem or situation
the most important criteria. The result is the failure to consider all available options and settling
for a sub-part outcome form a decision that fails to deliver all available value.

Selective Perception

This is the tendency to see a particular situation or issue from a chosen perspective. This is
related to the team-based mentality. We see all situations or issues through a common lens that
influences our ability to understand alternative or conflicting points of view or alternatives.

Confirmation Bias
Confirmation bias is to actively look for information or facts in a situation that supports a
particular choice or decision. This approach causes the decision maker to ignore evidence to
the contrary. This can also cause a failure to consider contrary information of positions.

Availability Bias

Availability bias is a focus on immediate information or situations that come to one’s mind.
The result is that we tend to believe the information or experience that we recall or
demonstrative or explicative of a situation or scenario. This comes at the expense of looking
for additional information that could lead to a further understanding of the situation. As such,
a decision is made on limited or superficial information.

Representation Bias

This is the tendency to believe a situation is indicative of a greater tendency. That is, it is related
to stereotyping. The decision maker believes that the situation represents all of the
characteristics of the population of which it is a part. It causes a failure in the perception of
one’s ability to predict a given outcome or result.

Randomness Bias

This is the tendency to see a pattern in otherwise random data or information. We increasingly
seek to harness new sources of information in the decision-making process. Our search for
meaning in information leads to an unreasonable reliance on insignificant results.

Self-Serving Bias

This is ones tendency to attribute the positive results of a decision or situation to one’s own
actions or decision. Likewise, it causes individuals to attribute negative consequences to factors
outside of our control. This can cause an inability to accurately assess or affect a situation
through decision making.

Fundamental Attribution Error

The tendency for people to over-emphasize personality-based explanations for behaviours

observed in others while under-emphasizing the role and power of situational influences on the
same behaviour.

Rationalization

The process of constructing a logical justification for a decision that was originally arrived at
through a non-rational decision process. Can be conscious, but is mostly subconscious.

Bandwagon Effect
The tendency to do (or believe) things because many other people do (or believe) the same.

Sunk Cost Bias

To make choices in a way that justifies past choices, even when the past choices no longer seem
valid.
Perceptual Distortions

Stereotypes

In order to simplify matters, we often tend to classify people and events into already-known
general categories or groups. We put people into a convenient category on the basis of some
characteristics (usually ethnic occupational, sexual, etc.) is known as stereotyping It helps to
simplify the complexity. It avoids individual differences and gives a wrong judgment.

Contrast Effect

When we compare something to something else, the contrast effect distorts our perception of
it, intensifying their differences. An explicit or implicit comparison can occur simultaneously
or at different times, and it can encompass a variety of traits, from physical traits such as colour
and taste to abstract qualities such as price and attractiveness.

Halo Effect

It refers to the tendency of judging a person entirely on the basis of a single trait that may be
favourable or unfavourable. Here, a single trait dominates other characteristics of the
individual.

Pygmalion Effect

The Pygmalion effect is a psychological term used to describe the impact of positive or negative
expectations on the performance of an individual or a group. The underlying idea is that when
a leader, authority figure, or role model believes we can succeed in a certain area, we will work
hard to meet their expectations. This also implies that we do better when more is expected of
us.

Although the Pygmalion effect is subconscious, it demonstrates others’ expectations can greatly
influence our performance. When someone thinks highly of us, we work hard to maintain that
reputation.

Selective Perception

Since we cannot observe everything going on about us, we engage in selective

perception. People selectively interpret what they see on the basis of their interests,
background experiences, and attitudes. It is the tendency not to notice and more quickly forget
stimuli that cause emotional discomfort and contradict our prior beliefs.

Projection
It refers to the tendency of people to see their own traits in other people. It means that, when
people make judgments about others, they project their own characteristics into others.

Decision Making

Rational decision making is the procedure of identifying a problem, finding a solution, and
making logical decisions.

Bounded rationality is a decision-making process that assumes reasonableness is limited (The

limitation factors include time, knowledge, and ability to acquire knowledge) when human
beings need to make decisions.

Intuition decision making is a process that involves making decisions by unconsciously

accessing information acquired through association and stored in long-term memory. This
process is referred to as using the "sixth sense."
 Learning

Classical and Operant Conditioning

Classical Conditioning Operant Conditioning

Involves learning through associations between Involves learning through consequences of

stimuli behaviour

Focuses on involuntary, reflexive responses Focuses on voluntary, goal-directed

behaviours

Key elements: unconditioned stimulus and Key elements: reinforcement and punishment
response

Emphasizes the role of the environment in learning Emphasizes the role of consequences in
learning

Pavlov's dog experiment is a classic example Skinner's operant chamber is a classic example

Response occurs before the stimulus Response occurs after the stimulus

Mainly applicable to emotional and physiological Applicable to a wide range of behaviours and
responses skills

Focuses on eliciting automatic, instinctual Focuses on shaping and modifying voluntary

responses behaviours

Involves stimulus generalization and Involves shaping and reinforcement schedules

discrimination

Does not require active participation from the Requires active participation and choice from
learner the learner
Social Learning Theory

Kolb's experiential learning theory is a theory of learning and development that emphasizes the
importance of experience in the learning process. It was developed by educational theorist
David A. Kolb in the 1980s.

Kolb's theory is based on the idea that learning is a four-stage cycle:

1. Concrete experience: The learner has a new experience or reinterprets an existing

experience.

2. Reflective observation: The learner reflects on the experience and considers its
meaning and implications.

3. Abstract conceptualization: The learner develops new concepts and theories based on
their reflections.

4. Active experimentation: The learner tests their new concepts and theories by applying
them to new situations.

Kolb believed that learners progress through this cycle as they learn and develop. However, it
is possible to enter the cycle at any stage and follow it through its logical sequence.

Kolb's theory also identifies four learning styles, which are associated with different
preferences for the different stages of the learning cycle:
• Diverging: Diverges prefer concrete experiences and reflective observation. They are
good at brainstorming and generating new ideas.

• Assimilating: Assimilators prefer abstract conceptualization and reflective observation.

They are good at understanding and organizing information.

• Converging: Converges prefer abstract conceptualization and active experimentation.

They are good at solving problems and making decisions.

• Accommodating: Accommodators prefer concrete experiences and active

experimentation. They are good at trying new things and learning by doing.
Social Learning Theory

Social learning theory, introduced by psychologist Albert Bandura, proposed that learning
occurs through observation, imitation, and modelling and is influenced by factors such as
attention, motivation, attitudes, and emotions. The theory accounts for the interaction of
environmental and cognitive elements that affect how people learn.1

The theory suggests that learning occurs because people observe the consequences of other
people's behaviours. Bandura's theory moves beyond behavioural theories, which suggest that
all behaviours are learned through conditioning, and cognitive theories, which consider
psychological influences such as attention and memory.

According to Bandura, people observe behaviour either directly through social interactions
with others or indirectly by observing behaviours through media. Actions that are rewarded are
more likely to be imitated, while those that are punished are avoided.

There are three core concepts at the heart of social learning theory. First is the idea that people
can learn through observation. Next is the notion that internal mental states are an essential part
of this process. Finally, this theory recognizes that just because something has been learned, it
does not mean that it will result in a change in behaviour.
 Personality

Allport’s Trait Theory

The first trait theory was proposed by a psychologist named Gordon Allport in 1936. Allport
found that one English-language dictionary contained more than 4,000 words
describing different personality traits. He categorized these traits into three levels:3

Cardinal Traits

Allport suggested that cardinal traits are rare and dominating, usually developing later in life.
They tend to define a person to such an extent that their names become synonymous with their
personality. Examples of this include the following descriptive terms: Machiavellian,
narcissistic, Don Juan, and Christ-like.

Central Traits

These general characteristics form basic personality foundations. While central traits are not as
dominating as cardinal traits, they describe the major characteristics you might use to describe
another person. Descriptions such as "intelligent," "honest," "shy," and "anxious" are
considered central traits.

Secondary Traits

Secondary traits are sometimes related to attitudes or preferences. They often appear only in
certain situations or under specific circumstances. Some examples include public speaking
anxiety or impatience while waiting in line.
Big 5 Personality Traits – OCEAN Framework

Openness

Openness to experience refers to one’s willingness to try new things as well as engage in
imaginative and intellectual activities. It includes the ability to “think outside of the box.”

Conscientiousness

Conscientiousness describes a person’s ability to regulate impulse control in order to engage

in goal-directed behaviours (Grohol, 2019). It measures elements such as control, inhibition,
and persistence of behaviour.

Extraversion

Extraversion reflects the tendency and intensity to which someone seeks interaction with their
environment, particularly socially. It encompasses the comfort and assertiveness levels of
people in social situations.

Agreeableness

Agreeableness refers to how people tend to treat relationships with others. Unlike extraversion
which consists of the pursuit of relationships, agreeableness focuses on people’s orientation
and interactions with others.

Neuroticism

Neuroticism describes the overall emotional stability of an individual through how they
perceive the world. It takes into account how likely a person is to interpret events as threatening
or difficult. It also includes one’s propensity to experience negative emotions.
MBTI Personality Types
The MBTI was developed by Katherine Briggs and is based on the typological theory of Carl
Jung who had proposed that there are four essential psychological functions by which we see
this world. These functions are sensation, intuition, feeling, and thinking.
Dark Triad

Narcissism

Narcissism comes from the Greek myth of Narcissus, a hunter who fell in love with his own
reflection in a pool of water, and drowned. Narcissistic people can be selfish, boastful, arrogant,
lacking in empathy, and hypersensitive to criticism.

Machiavellianism

The word comes from the renowned 16th-century Italian politician and diplomat Niccolo
Machiavelli. He earned notoriety when his 1513 book, "The Prince," was interpreted as an
endorsement of the dark arts of cunning and deceit in diplomacy. Traits associated with
Machiavellianism include duplicity, manipulation, self-interest, and a lack of both emotion and
morality.

Psychopathy

Personality traits associated with psychopathy include a lack of empathy or remorse, antisocial
behavior, and being manipulative and volatile. It's important to note that there is a distinction
between psychopathic traits and being a psychopath, with its commonly held association with
criminal violence.
Terminal and Instrumental Values – Milton Rokeach

Terminal values are the ultimate goals or end-states that a person or society aims to achieve.
They represent the desired outcomes or ends that we strive for in our lives. Some common
examples of terminal values include happiness, love, freedom, knowledge, and health.

Terminal values are often seen as more important and desirable than instrumental values, as
they represent the ultimate goals that we want to achieve. They are often the driving force
behind our actions and decisions.

Instrumental values, on the other hand, are the means or methods that we use to achieve our
terminal values. They represent the behaviors, attitudes, and qualities that we believe are
necessary to achieve our goals. Some common examples of instrumental values include
honesty, responsibility, respect, and discipline.