Motivation &Motivational

Theories
 INTRODUCTION
• The Nature of Motivation
• Most of us get up in the morning, go to school or work, and behave in ways that
are predictably our own. We respond to our environment and the people in it with
little thought as to why we work hard, enjoy certain classes, or find some
recreational activities so much fun. Yet all these behaviors are motivated by
something.
• Motivation refers to the forces either within or external to a person that
arouse enthusiasm and persistence to pursue a certain course of action.
• Employee motivation affects productivity, and part of a manager’s job is to
channel motivation toward the accomplishment of organizational goals. The study
3

of motivation helps managers understand

what prompts people to initiate action, what influences their choice of action, and
why they persist in that action over time.
• People have
needs—such as for recognition, achievement, or monetary gain—that translate into an internal
tension that motivates specifc behaviors with which to fulfill the need.
To the extent that the behavior is successful, the person is rewarded in the sense that the need is
satisfied.
• The reward also informs the person that the behavior was appropriate and can be used again in the
future.
Rewards are of two types: intrinsic and extrinsic.
• Intrinsic rewards are the satisfactions a person receives in the process of performing a particular
action.
Extrinsic rewards are given by another person, typically a manager, and include promotions, pay
increases, and bonuses. They originate externally, as a result of pleasing others
• Some ideas about motivation, referred to as content theories, stress the analysis of
underlying human needs and how needs can be satisfed in the workplace. Process
theories concern the thought processes that influence behavior. They focus on how
people seek rewards in work circumstances. Reinforcement theories focus on employee learning of
desired work behaviors

content theories focus on the concepts in the frst box, process theories on those in the second, and
reinforcement theories on those in the third.
• Hierarchy of Needs Theory
The best-known theory of motivation is Abraham Maslow’s hierarchy of needs.5
Maslow hypothesized that within every human being, there exists a hierarchy of
five needs:
1. Physiological. Includes hunger, thirst, shelter, sex, and other bodily needs.
2. Safety. Security and protection from physical and emotional harm.
3. Social. Affection, belongingness, acceptance, and friendship.
4. Esteem. Internal factors such as self-respect, autonomy, and achievement,
and external factors such as status, recognition, and attention.
5. Self-actualization. Drive to become what we are capable of becoming;
includes growth, achieving our potential, and self-fulfillment.
 • Expectancy Theory
Expectancy theory suggests that motivation depends on two things—how much we want
something and how likely we think we are to get it.
•.
Expectancy theory rests on four basic assumptions.
• First, it assumes that behavior is determined by a combination of forces in the individual
and in the environment.

• Second, it assumes that people make decisions about their own behavior in organizations.

• Third, it assumes that different people have different types of needs, desires, and goals.

• Fourth, it assumes that people make choices from among alternative plans of behavior,
based on their perceptions of the extent to which a given behavior will lead to desired
outcomes.
The Basic Expectancy Model.
The model suggests that motivation leads to effort and
that effort, combined with employee ability and
environmental factors, results in performance.
Performance, in turn, leads to various outcomes, each of
which has an associated value, called its valence. The
most important parts of the expectancy model cannot be
shown in the figure, however. These are the individual’s
expectation that effort will lead to high performance, that
performance will lead to outcomes, and that each
outcome will have some kind of value.
• Effort-to-Performance Expectancy The effort-to-performance expectancy is the
The
individual’s Expectancy Model
perception of the probability of
that Motivation
effort will lead to high performance.
When the individual believes that effort will lead directly to high performance,
expectancy will be quite strong (close to 1.00). When the individual believes that
effort and
performance are unrelated, expectancy is very weak (close to 0). The belief that
effort is
somewhat but not strongly related to performance carries with it a moderate
expectancy
(somewhere between 0 and 1.00).
Performance-to-Outcome Expectancy The performance-to-outcome expectancy
is the individual’s perception that performance will lead to a specific outcome.
For example, the individual who believes that high performance will result in a
pay raise has a high expectancy (approaching 1.00). The individual who believes
that high performance may lead to a pay raise has a moderate expectancy
(between 1.00 and 0). The individual who believes that performance has no
relationship to rewards has a low expectancy (close to 0).
• Outcomes and Valences Expectancy theory recognizes that an
individual’s behavior results in a variety of outcomes, or
consequences, in an organizational setting. A high performer,
for example, may get bigger pay raises, faster promotions, and
more praise from the boss. On the other hand, she may also be
subject to more stress and incur resentment from coworkers.
Each of these outcomes also has an associated value, or
valence—an index of how much an individual values a
particular outcome. If the individual wants the
outcome, its valence is positive; if the individual does not want
the outcome, its valence is negative; and if the individual is
indifferent to the outcome, its valence is zero.
 Equity Theory
After needs have stimulated the motivation process and the individual has chosen an
action that is expected to satisfy those needs, the individual assesses the fairness, or
equity, of the resultant outcome.
• Equity theory contends that people are motivated to seek social equity in the
rewards they receive for performance. Equity is an individual’s belief that the
treatment he or she is receiving is fair relative to the treatment received by
others.
• According to equity theory, outcomes from a job include pay, recognition,
promotions, social relationships, and intrinsic rewards. To get these rewards, the
individual makes inputs to the job, such as time, experience, effort, education, and
loyalty.
•
The theory suggests that people view their outcomes and inputs as a ratio and then
compare it to someone else’s ratio. This other “person” may be someone in the work
group or some sort of group average or composite.
• People who feel underrewarded try to reduce the inequity. Such an individual
might decrease her inputs by exerting less effort, increase her outcomes by asking
for a raise,distort the original ratios by rationalizing, try to get the other person to
change her or his outcomes or inputs, leave the situation, or change the object of
comparison.
• An individual may also feel overrewarded relative to another person. This is not
likely to be terribly disturbing to most people, but research suggests that some
people who experience inequity under these conditions are somewhat motivated
to reduce it.

• Under such a circumstance, the person might increase his inputs by exerting more
effort, reduce his outcomes by producing fewer units (if paid on a per-unit basis),
distort the original ratios by rationalizing, or try to reduce the inputs or increase
the outcomes of the other person
• Goal-Setting Theory
The goal-setting theory of motivation assumes that behavior is a result of
conscious goals and intentions. Therefore, by setting goals for people in the
organization, a manager should be able to influence their behavior. Given this
premise, the challenge is to develop a thorough understanding of the processes
by which people set goals and then work to reach them.
• In the original version of goal-setting theory, two specific goal characteristics—
goal difficulty and goal specificity—were expected to shape performance.
• Goal Difficulty Goal difficulty is the extent to which a goal is challenging and
requires effort. If people work to achieve goals, it is reasonable to assume that they will
work harder to achieve more difficult goals. But a goal must not be so difficult that it is
unattainable. If a new manager asks her sales force to increase sales by 300 percent, the
group may become disillusioned. A more realistic but still difficult goal—perhaps a
30 percent increase—would be a better incentive. A substantial body of research
supports
the importance of goal difficulty. In one study, for example, managers at Weyerhauser
set difficult goals for truck drivers hauling loads of timber from cutting sites to
wood yards. Over a nine-month period, the drivers increased the quantity of wood they
delivered by an amount that would have required $250,000 worth of new trucks at the
previous per-truck average load.21
• Goal Specificity
• Goal specificity is the clarity and precision of the goal. A goal of “increasing productivity” is not very
specific; a goal of “increasing productivity by 3 percent in the next six months” is quite specific. Some
goals, such as those involving costs, output, profitability, and growth, are readily amenable to specificity.
Other goals, however, such as improving employee job satisfaction, morale, company image and
reputation, ethics, and socially responsible behavior, may be much harder to state in specific terms.
• Like difficulty, specificity has been shown to be consistently related to performance. The study of timber
truck drivers just mentioned, for example, also examined goal specificity. The initial loads the truck
drivers carried were found to be 60 percent of the maximum weight each truck could haul. The
managers set a new goal for drivers of 94 percent, which the drivers were soon able to reach. Thus, the
goal was both specific and difficult.
•
Because the theory attracted so much widespread interest and research support from
researchers and managers alike, an expanded model of the goal-setting process was eventually
proposed. The expanded model, attempts to capture more fully the complexities of goal setting in
organizations.
• USING REWARD SYSTEMS TO MOTIVATE PERFORMANCE
Aside from these types of motivational strategies, an organization’s reward
system is its most basic tool for managing employee motivation. An
organizational reward system is the formal and informal mechanisms by which
employee performance is defined, evaluated, and rewarded.
• Rewards that are tied specifically to performance, of course, have the greatest
impact on enhancing both motivation and actual performance. But managing
rewards and motivation is not always as easy as it might first seem.
• Performance-based rewards play a number of roles and address a variety of
purposes in organizations. The major purposes involve the relationship of rewards
to motivation and to performance. Specifically, organizations want employees to
perform at relatively high levels and need to make it worth their effort to do so.
• When rewards are associated with higher levels of performance, employees will
presumably be motivated to work harder to achieve those awards. At that point,
their own self-interests coincide with the organization’s interests. Performance-
based rewards are also relevant regarding other employee behaviors, such as
retention and citizenship.

Telecommuting is becoming more and more common and can often help enhance
employee commitment and motivation. This man is spending his morning
working from home. He has served breakfast to his daughter and is now
discussing a work issue with a colleague. The flexibility afforded to him by his
employer helps him function more effectively as both a parent and an employee.
• Telecommuting
• Allowing employees to spend part of their time working offsite, usually at home reward system
The formal and informal mechanisms by which employee performance is defined, evaluated,
and rewarded

Merit Reward Systems

Merit reward systems are one of the most fundamental forms of performance-based
rewards. Merit pay generally refers to pay awarded to employees on the basis of the
relative value of their contributions to the organization. Employees who make greater
contributions are given higher pay than those who make lesser contributions.
• Merit pay plans, then, are compensation plans that formally base at least some meaningful
portion of compensation on merit. The most general form of merit pay plan is to
provide annual salary increases to individuals in the organization based on their
relative merit. Merit, in turn, is usually determined or defined based on the individual’s performance and
overall contributions to the organization. For example, an
organization using such a traditional merit pay plan might instruct its supervisors
to give all their employees an average pay raise of, say, 4 percent. But the individual
supervisor is further instructed to differentiate among high, average, and low performers. Under a simple
system, for example, a manager might give the top 20 percent
of her employees a 7 percent pay raise, the middle 60 percent a 5 percent or average
pay raise, and the bottom 20 percent a 3 percent pay raise.
• Incentive Reward Systems
Incentive reward systems are among the oldest forms of performance-based
rewards. For example, some companies were using individual piece-rate incentive
plans over 100 years ago Under a piece-rate incentive plan, the organization pays
an employee a certain amount of money for every unit he or she produces. For
example, an employee might be paid $5 for every dozen units of products that
are successfully completed.
• But such simplistic systems fail to account for facts such as minimum wage levels
and rely very heavily on the assumptions that performance is totally under an
individual’s control and that the individual employee does a single task
continuously throughout his or her work time. Thus, most organizations today
that try to use incentive compensation systems use more sophisticated
methodologies.
• Incentive Pay Plans Generally speaking, individual incentive plans reward
individual performance on a real-time basis. In other words, rather than
increasing a person’s base salary at the end of the year, an individual instead
receives some level of salary increase or financial reward in conjunction with
demonstrated outstanding performance in close proximity to when that
performance occurred. Individual incentive systems are most likely to be used in
cases in which performance can be objectively assessed in terms of number of
units of output or similar measures, rather than on a subjective assessment of
performance by a superior.
• Some variations on a piece-rate system are still fairly popular. Although many of
these still resemble the early plans in most ways, a well-known piece-rate system at
Lincoln Electric illustrates how an organization can adapt the traditional model to
achieve better results. For years, Lincoln’s employees were paid individual incentive
payments based on their performance. However, the amount of money shared (or the
incentive pool) was based on the company’s profitability. There was also a
wellorganized system whereby employees could make suggestions for increasing
productivity.
There was motivation to do this because the employees received one-third of the
profits (another third went to the stockholders, and the last share was retained for
improvements and seed money).
• Thus, the pool for incentive payments was determined by profitability, and an
employee’s share of this pool was a function of his or her base pay and rated
performance based on the piece-rate system.
• Lincoln Electric was most famous, however, because of the stories (which were
apparently typical) of production workers receiving a year-end bonus payment that
equaled their yearly base pay.
merit pay plan Compensation plan that formally bases at least some meaningful
• Pay awarded to employees on the basis of the relative value of their
Pay awarded
• contributions to organization
to the
• piece-rate incentive plan
Reward system wherein the organization pays an employee a certain amount of money for every unit he or
she produces .
In recent years, Lincoln has partially abandoned its famous system for business reasons, but it still serves as a
benchmark for other companies seeking innovative piecerate pay systems.

• Perhaps the most common form of individual incentive is sales commissions that are
paid to people engaged in sales work. For example, sales representatives for consumer
products firms and retail sales agents may be compensated under this type of commission system. In
general, the person might receive a percentage of the total volume of attained sales as his or her commission
for a period of time.
• Some sales jobs are based entirely on commission, whereas others use a combination of base minimum
salary with additional commission as an incentive. Notice that these plans put a considerable amount of the
salespersons’ earnings “at risk.”
• In other words, although organizations often have drawing accounts to allow the salesperson to live during
lean periods (the person then “owes” this money back to the organization), if he or she does not perform
well, he or she will not be paid much. The portion of salary based on commission is simply not guaranteed
and is paid only if sales reach some target level.
Other Forms of Incentive Occasionally, organizations may also use other forms of
• incentives to motivate people. For example, a nonmonetary incentive, such as additional
time off or a special perk, might be a useful incentive. For example, a company might
establish a sales contest in which the sales group that attains the highest level of sales
increase over a specified period of time will receive an extra week of paid vacation, perhaps
even at an arranged place, such as a tropical resort or a ski lodge.33 A major advantage of
incentives relative to merit systems is that incentives are
typically a one-shot reward and do not accumulate by becoming part of the individual’s base
salary. Stated differently, an individual whose outstanding performance entitles him or her to
a financial incentive gets the incentive only one time, based on that level of performance. If
the individual’s performance begins to erode in the future, then the individual may receive a
lesser incentive or perhaps no incentive in the future.
As a consequence, his or her base salary remains the same or is perhaps
increased at a relatively moderate pace; he or she receives one-time incentive rewards as
recognition for exemplary performance. Furthermore, because these plans, by their very
nature, focus on one-time events, it is much easier for the organization to change the focus
of the incentive plan. At a simple
level, for example, an organization can set up an incentive plan for selling one product during
one quarter, but then shift the incentive to a different product the next quarter, as the
situation requires.