6

MOTIVATION AND
JOB SATISFACTION
By Advance Saraswati Prakashan Pvt. Ltd
Sankhamul, 01-4780359
 Learning Objectives
After studying this chapter, reader will be able to:
 Know the concept and features of motivation
 Explain various motivation theories- historical and contemporary
perspectives
 Know the application of motivation theories
 Explain motivation for performance
 Know the concept of job satisfaction
 Explain the effects of job satisfaction on employees' performance

04/21/2025 2
Concept of Motivation
Motivation is a human psychological aspect.
It is the process of encouraging and stimulating the individuals to do the assigned job
according to the best of their ability.
It is the process of creating willingness among the employees to do the assigned work in
the best possible way. It is the act of inspiring employees to devote maximum effort to
achieve organizational objectives.
People do something to fulfill their basic and social needs.
Motivation is the art of inspiring and encouraging subordinates to do work in an effective
way so that both organizational and individual goals can be achieved.
A manager must have the knowledge of why and how people act in accordance with
organizational requirements. He must have knowledge to do a particular work with clear
vision. It is the responsibility of the manager to develop such an environment that workers
can perform their work in the best possible way.
Contd…

"Motivation means a process of stimulating people to action to achieve desired goals."

 William G. Scott
"Motivation is willingness to exert high level of effort to reach organizational goals,
conditioned by the effort’s ability to satisfy some individual need."
 Decenzo and Robbins
"Motivation is a general term applying to the entire class of drives, desires, needs,
wishes and similar forces that induce an individual or a group of people to work."
 Koontz and O’Donnell
"Motivation can be defined as a willingness to work to expand energy to achieve a goal
or reward."
 Dale S Beach
"The concept of motivation is mainly psychological. It relates to those forces operating
within the individual employee or subordinate which impel him to act or not to act in
certain ways.”
 Dalton E. McFarland
Features of Motivation
Motivation is a human psychological aspect. It influences the behaviour of subordinates in
accordance with organizational requirement. It is a continuous process and concentrates on
organizational goals. The following are the main features of motivation:

Psychological Complex and

Process Unpredictable
Continuous
Process
Positive or Pervasive
Negative Function
Features of
Motivation
Influences the Concentrated
Behaviour on Whole
Individual
 Contd…
1. Psychological Process:
Motivation is a psychological process. It is the process to achieve a desired result by stimulating and influencing
the behaviour of subordinates. A manager must be careful to understand the needs, motives and desires of
every worker in the organization. Subordinates differ in their approach and even two individuals cannot be
motivated with the same technique.

2. Continuous Process:
Motivation is a continuous process up to the functioning of the organization. A satisfied person of today may not
be satisfied tomorrow. When one need is satisfied, another need emerges. Therefore, motivation is a never
ending process until the completion of objectives. It is the responsibility of the management to develop new
techniques, systems and methods to fulfill the changing needs of workers.

3. Complex and Unpredictable:

Motivation is a complex and unpredictable task. Human wants are unlimited and they are changeable according
to time and situation. A satisfied person of the present may not be satisfied in the future. In a similar manner,
even two persons may not be motivated with similar behaviour and facilities. Therefore, a manager must be
more conscious to motivate subordinates and to achieve objectives.

4. Pervasive Function:
Motivation is the pervasive function of all levels of management. Every manager from top to the lowest level in
the management hierarchy is responsible for motivation. A manager is primarily responsible for motivating his
subordinates and secondly other subordinates in management hierarchy. This is essential to develop the concept
of group work and team spirit among all members of the organization.
 Contd…
5. Influences the Behaviour:
One of the important parts of motivation is to influence the behaviour of subordinates. Management has
to influence the behaviour of workers and inspire them to concentrate more on their works. Therefore, a
manager has to play the role of a leader to influence the behaviour of subordinates to achieve common
goals.

6. Concentrated on Whole Individual:

Individuals are motivated to fulfill their unlimited needs. All the individual employees have two types of
life that is work life and family life. They need to fulfill family needs along with their individual needs.
Therefore, in one angle, they expect better work life and in another angle, they expect good incentives to
fulfill family expectation. It is the responsibility of the management to provide better working
environment to employees and proper financial incentives on the basis of skill so that they can satisfy
the needs of family members.

7. Positive or Negative:
Motivation may be positive or negative. A positive motivation promises incentives and rewards to
workers. Incentives involve both financial and non-financial. Negative motivation is based on punishment
for poor performance like minimizing wage, demotion, job termination etc. On the basis of requirements,
manager can use both positive and negative motivation for better performance.
 Importance of Motivation
Motivation is one of the important parts of managerial functions. A manager becomes
unsuccessful if he fails to motivate his subordinates. There is a close relationship between
motivation and performance. The following are the importance of motivation:

Importance of
Motivation High Level of
Lead to Profitable
Productivity
Operation
Stability of M inimizes Minimizes
Workforce Disputes and Supervision Cost
Remedy for Strike
Effective Use of
Resistance to
Human
Change
resources
Satisfaction of A chievement of Basis of
Employees Goals Coordination
 Contd…
1. Lead to Profitable Operation:
Motivation is an important tool that leads the organization in profitable operation. Motivated workers
perform their duties with full responsibility. The development of self responsibility among the workers
contributes for the best utilization of organizational resources like materials, money, machines and
others.

2. High Level of Productivity:

Motivation contributes to develop working efficiency of employees. When employees are actually
motivated they improve their working efficiency. The development of working efficiency of workers leads
to maximize productivity through proper utilization of resources.

3. Best Remedy for Resistance to Change:

The change in the management system and organizational structure is essential to adjust an
organization and its business activities according to changing environment. In some situation workers,
specially, their unions may create resistance to change.

4. Effective Use of Human Resources:

Manpower is the main active factor of production and is responsible for the best utilization of
organizational resources. Motivation is the main instrument which creates the willingness among workers
to do their work in the best possible way.
 Contd…
5. Satisfaction of Employees:
The satisfaction of employees is essential for organizational effectiveness. Motivation helps
to satisfy employees and develop morality among them. Employees with high morale
become loyal and dedicated to the organization. They perform assigned jobs in the best
possible manner. Generally, employees are motivated through facilities both financial and
non-financial.

6. Minimizes Disputes and Strike:

Motivation is an important tool, which helps to maintain coordination and develop a feeling
of harmony among workers and with the management. It minimizes misunderstanding and
disputes between the management and workers.

7. Basis of Coordination:
Motivation is the basis of coordination among all members of the organization. Motivated
employees develop a better understanding among themselves. They appreciate their
mutual problems and resolve differences through mutual consent. The main reason for the
differences in approach among the workers is the lack of coordination.
 Contd…
8. Stability of Workforce:
It is known that a motivated and stable workforce is the potential assests of the organization.
Motivation directly or indirectly facilitates the stability of the workforce. Generally, frustrated
and dissatisfied employees may think of leaving the organization for better opportunity.

9. Minimizes Supervision Cost:

Motivated employees perform their work themselves. In other words, the concept of self
responsibility is developed among them and they perform work smoothly. For such
employees, simple guidance and timely suggestion is sufficient.

10.Achievement of Goals:
Every organization is established to achieve definite objectives. Similarly, the main
responsibility of the management is to focus on organizational objectives. Motivated workers
put their effort toward the attainment of organizational objectives
 Techniques of Motivation
Managers can use different techniques of motivation on the basis of effectiveness .

Motivation is the process of encouraging and stimulating subordinates to devote maximum effort
for developing organizational efficiency and to achieve objectives. Management may use
different techniques to motivate employees. The following are the common techniques of
motivation of employees:
Techniques of Motivation

Financial Incentives Participation Delegation of Authority

Job Security Job Enlargement Job Enrichment

Job Rotation Reinforcement Quality of Work Life

Competition
Contd…
1. Financial Incentives:
Money is regarded as a symbol of social prestige, recognition and achievement in the materialistic world.
People satisfy their higher order needs by money. Wages, salary, profit sharing, leave with pay, medical
reimbursement etc. motivates employees to perform better.

2. Participation:
Participation refers to involvement of employees in planning and decision making. This helps to fulfill
esteem needs of employees. Participation is one way of developing initiatives among employees.
Employees’ participation helps management in cost reduction, safety measures, materials handling, and
operating methods.

3. Delegation of Authority:
Delegation of authority is assigning certain part of work to subordinates and giving them the required
authority to perform the assigned task effectively. It helps in developing a feeling of dedication to the work
among the subordinates.

4. Job Security:
Job security implies that employees would continue on the same job in the same organization. They enjoy
economic and social security through health and welfare programs, security against sickness, disability
and old age provision.

5. Job Enlargement:
Job enlargement is concerned with addition of extra job responsibility of same level to the employee. It
refers to mounting complexity of the job. Employees perform more varied task of the same level. It
 Contd…
6. Job Enrichment:
Job enrichment is concerned providing higher level job responsibility to employees. In other words, it
refers to vertical expansion of a job by adding planning and evaluating responsibilities. Employees
are empowered to assume some tasks typically done by their managers.
7. Job Rotation:
Job rotation refers to shifting an employee from one job to another job. It reduces the boredom and
disinterest through diversifying the employees’ activities. The basic purpose of job rotation is to
increase the skill and knowledge of employee about related jobs.
8. Reinforcement:
Reinforcement is a formal and powerful tool for motivation. A person is motivated when he responds
to stimuli in consistent patterns of behaviour over time. Behaviour which appears to lead a positive
consequence needs to be repeated while behaviour that leads negative consequence not to be
repeated.
9. Quality of Work Life:
Quality of work life is an attempt to develop a formal program to integrate employee needs and
well-beings with the intention to improve productivity. Quality of work life ensures greater worker
empowerment, adequate and fair compensation, safe and healthy working conditions and higher
level of job satisfaction.
10. Competition:
Competition is a widely used tool for motivation. Employees in organization compete with each
 Theories of Motivation
Many researchers involve for making research in the field of motivation. Various scholars have
given their views about how to motivate employees. These theories involve need hierarchy,
two factors, equity, ERG, Expectancy theory etc. Brief explanations of these theories are as
follows:

Theories of Motivation

Historical Perspectives Contemporary Perspectives

 Need Hierarchy  Equity Theory

 Two Factors  Expectancy Theory
 Theory X and Theory Y  Goal Setting Theory
 Achievement Model  Reinforcement Theory
 ERG Theory
 Historical Perspectives
1. Need Hierarchy Theory
Abraham Maslow, a human psychologist developed a theory of human needs in
1943. People always have needs, and when one need is relatively fulfilled, others
emerge in a predictable sequence. Human needs tend to follow a basic hierarchical
pattern from the most basic needs to the highest level needs. Until the most basic
needs are fulfilled, a person will not try to meet his higher level needs. His theory of
motivation is based on some assumptions that comprise of—
 Maslow focuses that human wants are unlimited and to fulfill unlimited needs they
are motivated to do assigned job.
 Human needs and motives are complex Needs form hierarchy
 Unsatisfied needs are the reasons of motivation.
 People seek growth and development.
The explanation of Maslow’s need hierarchy theory is as follows:
Contd…
Contd…
a. Physiological Needs:
Physiological needs are also known as basic needs and are common to all individuals. These needs involve food,
water, clothes, shelter, rest and other similar basic needs. The fulfillment of such needs is essential for the
survival of all human beings. These needs are finite in nature.
b. Safety Needs:
When people fulfill their basic needs they think about future security.Security need includes protection against
threat of job insecurity. Generally, safety can be sub-divided into three types: economic security, physical
security and social security. Economic security involves assurance about the fulfillment of basic needs on a
continuous basis. Physical security involves protection against unexpected events like fire, accident etc. Social
security involves needs for security in old age, diseases and permanent incapability.
c. Social Needs:
Human beings are social animals and they always want to live in society. They want to enjoy social elements such
as love and affection, friendship, sense of belonging, acceptance and membership. When management does not
fulfill affiliation needs, employee dissatisfaction appears regularly in different forms like frequent absenteeism,
low productivity, stress-related behaviours and emotional breakdowns.
d. Esteem Needs:
These needs are psychological in nature and at higher level in hierarchy. There are two types of esteem needs-
self esteem and public esteem. Self-esteem is the internal recognition and is concerned with self-respect. Public
esteem is external recognition and is concerned with respect from others.
e. Self-Actualization Needs:
These needs are related to personal growth, self-fulfillment, and the realization of one’s full potential. Self-
actualization is the desire to become what one is capable of becoming. At this level, an individual seeks
challenging work assignments that allow for creativity and opportunities for personal growth and advancement.
 2.Two Factor Theory/ Hygiene Theory
Frederick Herzberg developed the two- factor theory for work motivation. He was among the
first behavioural scientists to look at motivating employees from different angles. This theory is
based on the contents of interviews conducted on 200 engineers and accountants. In carrying
their research, Herzberg and his associates asked participants to describe job experience that
produced good and bad feeling about their jobs. From the research he found that there are two
sets of needs or factors, namely, hygiene factors and motivating factors.

Two Factor Theory and its

Results
Hygiene Factors Motivator Factors
 Salaries, wages and other  Sense of personal achievement
benefits  Status
 Company policy and  Recognition
administration  Challenging/ stimulating work
 Good inter-personal  Responsibility
relationships  Opportunity for advancement
 Quality of supervision  Promotion
 Job security  Growth
 Working conditions
 Work/ life balance
When in place, these factor results in When in place, these factor results in
 General satisfaction  H igh motivation
...  Prevention of dissatisfaction  H igh satisfaction
 Strong commitment
 Contd…
A. Hygiene Factors:

Hygiene Factors are also known as dissatisfiers or maintenance factors. These are external to the job
itself. These factors save the employees from job dissatisfaction. The presence of these factors does
not motivate employees but the absence of these cause dissatisfaction. When these factors are
adequate, people will not be dissatisfied but they will not be satisfied either. Hygiene factors include:
Company policy and administration
 Supervision
 Relationship with supervisor
 Working conditions
 Salary
 Relationship with peers
 Personal life
 Relationship with subordinates
 Job security,
 Status
 Contd…
B. Motivating Factors:
Motivating factors are also known as motivators, satisfiers or job content factors. These factors
are job centered and relate directly to the job itself. The presence of motivating factor causes high
level of motivation and job satisfaction, whereas their absence do not cause high dissatisfaction.
These factors include: Achievement
 Recognition
 Advancement
 Work itself
 Personal growth
 Responsibility
Herzberg came to the conclusion that enriched jobs are the key to motivating employees. An
employee is motivated to devote his best effort only when he finds a challenging job, scope of
innovation, freedom, growth and recognition of his efforts and achievement from the
management.
 Comparison between Maslow and Herzberg

The following are the comparison between Maslow’s and Herzberg’s theories of motivation:

Similarities: The following are the similarities between the two theories:
 Both Maslow and Herzberg emphasized on the importance of the need for employees'
motivation.
 Maslow’s physiological; safety and social needs are similar to Herzberg’s hygiene or
maintenance factors. Esteem and self-actualization needs of Maslow’s theory are similar to
Herzberg’s motivational factors.
 Therefore, Herzberg’s two factor theory is a modified version of Maslow’s need hierarchy
theory. The following figure will be helpful in comparing these two theories:
 Contd…
Dissimilarities: The following are the dissimilarities between the two theories:

Maslow classified human needs into five levels whereas Herzberg classified human motives
into two factors. Therefore, Maslow’s theory is expressive while Herzberg's theory is
prescriptive.
 Maslow formulated the theory in terms of needs and Herzberg in terms of goals or rewards.

 Maslow did not focus on the job content aspect whereas Herzberg emphasized on job
enrichment aspects.
 Maslow has explained motivation in terms of need hierarchy and according to him an
unsatisfied need is a motivating factor. But Herzberg has divided various factors into two
categories consisting of hygiene and motivating factors.
 Maslow’s theory is applicable to all level of employees whereas Herzberg’s theory is more
applicable to professional employees.
Contd…
Comparison between Need Hierarchy and Two Factor
Theories

Self Motivators;
Actualization Achievement
Recognition, etc.
Esteem

Belongingness &
Love Hygiene Factors:
Company policy
Safety Technical Supervision, etc.
Physiological
 3. Theory X and Theory Y (Douglas
McGregor)
Douglas McGregor was the professor of management. He proposed two distinct views of human
motivation: one negative labeled theory X and another positive labeled theory Y. He concluded
that manager view of human nature is based on group assumption either positive or negative.
According to him theory Y is based on carrot approach which involves a set of optimistic
assumption about human nature. Theory X is based on stick approach which involves a set of
pessimistic assumption about the worker.
Theory X is based on the traditional assumption about human behaviour. The general
assumptions of theory X are:
 Employees inherently dislike work and whenever possible, will attempt to avoid it.
 Since employees dislike work, they must be corrected, controlled or threatened with punishment
to achieve desired goals.
 Employees will avoid responsibility and seek formal direction whenever possible.
 Most workers place securities above all other factors associated with work and will display little
ambition.
 Contd…
Theory Y is an optimistic view of workers. It believes in positive and intrinsic motivation. Theory
Y represents participative management. The subordinates, managers and organization are seen
as mutually supportive. This theory is based on the following assumptions:
 Work is natural activity like play or rest
 People will become committed to organizational objectives if they are rewarded for doing so.
 People will exercise self-direction and self control if they are committed to objectives.
 The average person can learn to accept and seek responsibility.
 Many people in the general population have imagination, ingenuity and creativity.
As the managers get the work done from the subordinates, it is necessary for them to
understand the behaviour of each worker as well as group. Managers must create good working
conditions, which is possible, only by knowing the behavioural patterns. On the basis of
effectiveness managers need to implement both theory Y and theory X of motivation.
 4. McClelland’s Theory of Need (Achievement Motivation Model)
The lower level needs in Maslow’s model are fulfilled by the physiological, societal and working
system of the organization. However, they are not strong motivator for long time. The Harvard
psychologist David McClelland concluded that the most prominent need is the need for
achievement, power and affiliation. The primary motive of every individual is the achievement in
competitive situation based on established standard. A major factor that provides willingness to
perform the given task is the intensity of individual’s needs for achievement. A brief description
about these factors is as follows:

Achievement Motivation Model

Need for Affiliation Need for Power Need for Achievement

 Contd…
a. Need for Affiliation:
Human beings are social being and this need is concerned with social need. It is the desire to
establish and maintain friendly and good relation with employees working together. Human beings
always want to maintain friendly and warm relation with others. The people having this level needs
have characteristics of value the feeling of others, strong desire of acceptance, and establishing a
platform of relationship.

b. Need for Power:

This is the need to dominate, influence, and control over others. It is concerned with leader-followers
relationship. The people having this level of needs set goals, prepare plans, and direct activities for
implementation plans. They have characteristics of exercise control over others, establish leader-
follower relations and desire to influence and direct followers.

c. Need for Achievement:

The major focus of this theory is toward achievement in profession. This is the need for challenge,
personal accomplishment and success in competitive environment. The people having this level of
needs are characteristic of self responsibility, calculate risk, set moderate goals, want concrete
feedback, not motivated by money only etc.
A manager needs to identify the needs of individual workers to get things done from them. Different
workers have different level of needs. So the main responsibility of the manager in applying this
theory is to identify the needs of workers.
 5. ERG Theory (Clayton Alderfer)
Alderfer’s ERG theory extends and refines Maslow’s need hierarchy theory. This
theory classified human needs in three levels in hierarchy i.e. ERG. The ERG stands for
three basic need categories: Existence, Relatedness, and Growth. This theory argues
that there is no rigid hierarchy needs. People may operate more than one need at the
same time, for example, physiological and security needs could be operated at a time.

Relatedness Needs

Existence of Needs ERG Theory of Motivation Growth Needs

 Contd…
a. Existence of Needs:
They are basic human needs essential for human survival. They are just like of physiological and
security needs of Maslow’s hierarchy. Physiological needs are the basic needs essential to survive
which includes food, shelter, clothing, water, air, sleep etc. Similarly security needs involve
protection against unexpected events like fire, accident, security in old age, diseases and
permanent incapability etc.

b. Relatedness Needs:
These needs are concerned with maintaining relation with others. They are just like social and
esteem needs. Social needs include affection, sense of belonging, acceptance and friendship.
Esteems needs involves internal factors such as self-respect, autonomy and achievement and
external factors such as status, recognition and attention.

c. Growth Needs:
They are high level needs and concerned with self esteem and self actualization. These needs are
related to personal growth, self-fulfillment, and the realization of one’s full potential. Self actualized
individuals are creative, independent, and spontaneous and have good perception of reality.
Manager of an organization needs to identify the needs of individual workers to get things done
from them. Different workers have different level of needs. So the main responsibility of the
manager in applying this theory is to identify the needs of workers.
 Contemporary Perspectives
1. Equity Theory
Equity theory of motivation is propounded by J. Stacy Adams. It plays an important
role for motivation of employees. This theory focuses that motivation is the outcome of
equity. Generally, individuals compare their job inputs and outcomes with those of
others and then respond either they are in equity position or not. According to this
theory of motivation, input and output ratio will help the individual to have an idea
being in a situation of equity or inequity.
Equity Theory

Input Output
 Contd…
a. Input: The inputs variables of individual involve level of education, experience, effort of job,
ability, efficiency, time responsibility, position acquired, special knowledge etc.
b. Outcomes: Outcomes may be obtained in terms of promotion, pay raise, status, recognition,
values, benefits, development, and other incentives.
The most important consideration of equity theory is to choose the referent. The selection of
relevant person or group of persons is the basis of comparison and later on to find the position
of equity or inequity. There are four referent comparisons that an employee can use (Robbins,
2003):
i. Self Inside: An employee's experiences in a different position inside his or her current
organization.
ii. Self-outside: An employee's experiences in a situation or position outside his or current
organization.
iii.Other Inside: Another individual or group of individuals inside the employee's organization.
iv.Other Outside: Another individual or group of individuals outside the employee's
organization.
Contd…
In equity theory the comparison process involves the following steps:
a. Evaluation of Self: At the primary stage, an individual or group of individuals
make self evaluation i.e. their inputs and outcomes. The inputs are basically
concerned with contribution given by them for organizational effectiveness.
Similarly, outcomes are concerned with facilities and incentives gained from the
organization. This helps to know their inputs-outcomes ratio.
b. Evaluation of Others: At the second stage, an individual or group of
individuals make evaluation of relevant individual or group of individual. The
evaluation is made about inputs that are given by others to the organization and
outcomes gained by them from the organization. This helps to know others input-
outcomes ratio.
c. Comparison of Self with Others: After evaluation self and evaluation of
others, comparison is made between the ratios of self and others. At first inputs-
outcomes ratio of self is determined and again inputs-outcomes ratio of relevant
others are determined. After determination of both the ratios, a comparison is
made which helps to find out deviation, if any.
Contd…
d. Feeling of Equity or Inequity: On comparison of ratios of inputs-outcomes
of employees and relevant employees, there is the possibility of three alternative
perceptions of individuals. The ratio comparison and perception of employees is
as follows:
Ratio Comparison Perception
O O
< Inequity due to under awarded
IA IB
O O
= Equity
IA IB
O O
> Inequity due to over awarded
IA IB
Where, represents the employee and represents the relevant employee.
From the above figure, it is noted that when an employee's ratio is less than ratio of relevant
employee it is termed as inequity due to under awarded. If both ratios are equal it is taken
as equity. Similarly, if ratio of employee is greater than relevant employee it termed as
inequity due to over awarded.
 Contd…
e. Action to Reduce Inequity: When an employees or group of employees have
feeling of inequity than they can take necessary measures to reduce inequity. An
individual may take any one the following action to reduce inequity:
 Change in inputs (e.g. increase or decrease effort)
 Change in outcomes (e.g. demand for more incentives compare to relevant person)
 Distort in perceptions of self (e.g. can work a lot harder than everyone else)
 Distort perception of others (e.g. relevant person is not desirable as earlier thought it
was)
 Choose a different relevant person (e.g. select other comparable person)
 Leave the field (e.g. quit the job)
 Contd…
2. Expectancy Theory (Victor Vroom)
At the present situation Victor Vroom's expectancy theory is also taken as one of the widely
accepted motivation theory. Expectancy theory focuses that willingness of an individual to act
in certain way depends on the fulfillment of his expectation followed by the outcomes.
Expectancy theory emphasizes that an employee will be motivated to devote a high level of
effort when he believes that effort will lead to a good performance appraisal and that
appraisal will provide good rewards. The basic element of this theory is that motivation
depends upon how much an employee wants something and how likely he thinks he is to get
it. According to this theory:
Motivation = Expectancy × Valence (Goals)

Individual Individual Organizational Personal

Effort Performance Reward Goals
 Contd…
a. Effort—performance Relationship (E—P): It refers to a person's perception of the
probability that effort will lead to performance. Expectancy is defined as a probability
range between 0.0 to 1.0. When there is possibility of certainty on accomplishment of
assigned task than E—P will be 1.0. Similarly when there is no certainty on
accomplishment of assigned task than E —P will be 0.0
b. Performance—reward Relationship (P—R): The degree to which an individual
believes that performing at a particular level will lead to the attainment of a desired
outcome or reward. If a person perceives there is absolute certainty that a high
performance will lead to a pay raise then P—R will be close to 1.0. Similarly, if a person
perceives there is absolute uncertainty that a high performance will lead to a pay raise
then P—R will be close to 0.0.
c. Reward—personal Goal Relationship (R—G): It is the degree to which
organizational rewards satisfy an individual's personal goals. It shows the
attractiveness of those potential rewards for the individual. When an individual
perceives that outcome leads to a high level of satisfaction then he will be motivated
to work. It is anticipated satisfaction or dissatisfaction that an individual feels toward
an outcome. It ranges from -1 to +1.
 Contd…
3. Reinforcement Theory (B.F. Skinner)
Reinforcement theory emphasizes that individual behaviour at work is the outcome of
its consequence. This approach to motivation argues that such type of behaviour
which gives reward consequence is likely to be repeated. Similarly, such behaviour
which gives punishment consequence is less likely to be repeated. The main focus of
this theory is to modify the behaviour of employees in the job. There are four types of
reinforcement that can result from behaviour. They are as follows:

Positive
Avoidance Punishment Extinction
Reinforcement
 Contd…
a. Positive Reinforcement: It is an important means of strengthening behaviour. It involves reward
when a desired behaviour is performed by the employees. When a manager observes an employee
doing better job performance and offer praise, it serves as positive reinforcement for the behaviour
of better performance. Other common tools of positive reinforcement involve pay increase,
promotion, leave without pay and other awards. Positive reinforcement attracted individuals to
repeat behaviour which is supportive for achieving organizational goal.
b. Avoidance: Avoidance is one of the tools of strengthening desired behaviour. For example, an
employee may come to office on time to avoid a warning of manager. The employee is motivated to
perform the behaviour of punctuality to avoid an unpleasant consequence. Similarly, when manager
stops criticizing employee whose poor performance has been improving then employee repeats that
behaviour which will improve his working skills.
c. Punishment: It is a reinforcement tool that is used by managers to weaken undesired
behaviour. Manager may take disciplinary action when an employee is loafing, doing poor work,
coming late on work, or interfering other employees for doing effective work. This helps to reduce
unpleasant behaviour and employees choose to do such behaviour that will give positive
consequence.
d. Extinction: Extinction can be used to weaken the previously rewarded behaviour if it is unproductive
and repeated for many times. In other word, it is used to weaken undesired behaviours by simply
ignoring or no reinforcing them. This occurs in the situation of specific behaviour not reinforced by
management in time. For example, if the manager never responds to complaint made by an
 Contd…
4. Goal Setting Theory
Goal-setting theory refers to the effects of setting goals on subsequent performance. Edwin
Locke found that individuals who set specific, difficult goals are performed better job
activities than those who set general, easy goals. Goal setting theory initiates that when
challenging goals are set for an employee, the proper tools are provided to accomplish those
goals and positive feedback is given. The employee feels satisfaction with the performance
and the reward. Edwin Locke proposed five basic principles of goal-setting: clarity, challenge,
commitment, feedback, and task complexity. Brief explanation of these principles is as
follows:
 Contd…
a. Clarity. When a goal is clear and specific, with a definite time set for completion, there is
less misunderstanding about what behaviours will be rewarded. Therefore, goal must be
specific, measurable and time-bound
b. Challenge. One of the most important characteristics of goals is the level of challenge.
People are often motivated by achievement, and they will judge a goal based on the
significance of the anticipated accomplishment..
c. Commitment. Goals must be understood and agreed upon if they are to be effective.
When employee believes that their goal is consistent with the goals of the company, then
they are committed to accomplish company goal. Goal commitment and difficulty often
work together.
d. Feedback. In addition to selecting the right type of goal, an effective goal program must
also include feedback. Feedback provides opportunities to clarify expectations, adjust goal
difficulty, and gain recognition. It is important to provide benchmark opportunities or
targets
e. Task Complexity. If a goal is complex, it is necessary to give enough time to overcome
the difficulty involved in completing the task. For highly complex task, it is necessary to
 Application of Motivation Theories
Managerial application of motivation theories should be studied from five
perspectives consisting of productivity, absenteeism, turnover, organizational
citizenship, and job satisfaction. Many scholars have given their views regarding
motivation of employees like need theories, equity theory, expectancy theory,
reinforcement theory, path goal theory and so on.
Need theories explain motivation in term of need. They are hierarchy of need,
motivation and hygiene factors, ERG and McClelland’s need theory. Equity theory
states that fair and equitable treatment of employees influence motivation.
Expectancy theory explains the link between effort, performance, anticipated
reward and goal achievement. Reinforcement theory explains that behaviour is
determined by its consequences. However, all the motivation theories given by
many scholars may not be effective all the time because it is affected by situation.
Contd…
Therefore, managers should consider the following factors for application of
motivation theories in management:

Establishing pay
structure

Employee Variable Pay

Involvement Programs
Application
of Motivation
Theories
A lternative Work Flexible Benefits
A rrangement

Job Redesigning
 Contd…
1. Employees Involvement:
Employees involvement involves two programs consisting of participative management and representative
participation. Participative management is concerned joint decision making. In this program,
subordinates involve in decision making process with immediate superior. Representative participation
is concerned with development of joint management council and employees representation in board. The
objective of it is to redistribute power within an organization, giving employee equal level with the interest
of management and stakeholders.

2. Establishing Pay Structure:

The establishment of proper pay structure is one of the important means of motivating employees. There
are many way for developing pay structure for employees. But for establishing pay structure it is essential
to balance internal equity and external equity. Internal equity focuses on value of job to the organization.

3. Variable Pay Programs:

In addition to the basic pay structure, organizations also use variable pay plan to motivate the employees
for better performance. Additional pay plan is developed by focusing skills, efficiency, knowledge and
performance of employees. Such variable pay plans involve piece rate pay, merit based pay, bonuses,
skilled based pay, profit sharing plans, gain-sharing, and employee stock ownership.
 Contd…
4. Flexible Benefits:
Flexible benefits involve a broad range of indirect compensation, other than salary, that organizations
provide to their employees. Some benefits are legally mandatory, such as workers' compensation,
social security, and unemployment insurance etc. whereas some benefits are optional such as holidays
pay, health insurance, awards and prizes etc

5. Job Redesigning:
The careful and systematic job redesigning is supportive to derive the higher level of employee
motivation and organizational performance. For job redesigning it is to consider many factors such as
skill variety, task identify, task significance, autonomy of employees and their performance feedback.

6. Alternative Work Arrangements:

One of the important approaches for motivation of employees is to develop alternative work
arrangements. The common tools of alternative work arrangement involve flexible work time and job
sharing and tele-communication.
 Motivation for Performance
Motivation is human psychological concept. It is an important process of understanding human
behaviour. It is the act of stimulating and encouraging people to perform their job willingly and
effectively. It is an inner state within the individual that encourage, direct and sustain behaviour
toward goal achievement.

There is close relationship between motivation and performance. Motivated employees devote
their duties according to their best of ability. They solve problems and difficulties in performance
themselves through mutual consultation and understanding.

Job performance = Motivation × Ability

Motivation and job performance are closely connected because every worker must have some
degree of motivation just to go to work. Job performance is the outcome of motivation and ability
of employees. Consequently, many large firms train supervisors and managers to motivate their
employees or develop methods that will enable them to understand the factors that motivate
individual employees.
 Contd…
Motivation for Performance

Motivation Performance

Motivation Performance

It is to be noted that high level of motivation tends to better performance of employees.

Similarly, low level of motivation means low level of performance of employees. Therefore,
employee motivation and performance are key factors for successful functioning of business.
Owners, managers and supervisors know positive motivation leads to better performance and
higher productivity.
 Contd…
Relations of Reward-Motivation-Performance
Extrinsic Reward
Employee Motivation High Performance
Intrinsic Reward

Management needs to provide both extrinsic and intrinsic incentives and rewards to the employees
for their motivation. The high employee motivation tends to high level of performance. The
extrinsic incentives involve pay, fringe benefit, job security, good working condition, supportive
supervision, status, power, promotional opportunities, group working atmosphere, respect,
recognition, praise, and so on. Similarly, intrinsic incentives involve sense of achievement,
involvement, self-esteem, challenge, self-expression and self-development. It basically focuses on
job satisfaction and high level of motivation of employees.
 Concept of Job Satisfaction
Job satisfaction is an employee's general attitude toward the job. It is
an overall attitude of liking and disliking of the job. Job satisfaction is
the major concern of management. High job satisfaction implies that
employees like and value their job and feel positive toward the job.
Job satisfaction is an integral component of organizational climate
and important element of maintaining management and employee
relationship.
Some of the definitions given by prominent scholars are as follows:
"Job satisfaction is the amount of overall positive feelings that
individuals have toward their job."
 Arnold and Feldman
"job satisfaction is an individual’s general attitude toward his or her
job’."
 Stephen P Robbins
"Job satisfaction is a set of favourable or unfavourable feelings with
which employees view their work."
 Newstrom and Davis
 Contd…
According to Arnold and Feldman, a model of job satisfaction is shown below:
Expectation about Job Discrepancies
 Pay
 Work itself
 Promotion
 Supervision
 Work group Employee Job
 Working conditions Satisfaction
According to Arnold and Feldman the comparison between an individual's expectation
about job and actual job conditions in the organization determines his job satisfaction or
dissatisfaction. Therefore job satisfaction is a result of employees’ perception of how their
job fulfills their expectation. It is determined by the discrepancy between what individual
expect to get from their job and what the job actually offer.
Different Dimensions of Job Satisfaction
 Effects of Job Satisfaction on Employees'
Performance
Job satisfaction is an employee's overall attitude of liking and disliking of the job.
Managers are concerned about the consequences of job satisfaction for employee
behaviour. The effect of job satisfaction on employees' performance is studied in the
following perspectives:
 Prodctivity

 Absenteeism

 Employee turnover

 Organizational citizenship
Contd…
1. Job Satisfaction and Productivity:

The productivity is concerned with maximization of output, business turnover, profit and
wealth of the organization. It focuses for the best utilization of organizational resources
including manpower. The best use of human resource facilitates for proper mobilization of
other physical resources consisting of materials, machines and money. It contributes for
the development of working efficiency of the organization which provides positive impact
on its productivity

2. Job Satisfaction and Absenteeism:

Absenteeism is the failure to report the progress of work to the management on time.
There is negative correlation between job satisfaction and absenteeism. When job
satisfaction level is high, absenteeism tend to be low. In such situation employees give
importance to their job. Similarly, when job satisfaction level is low, absenteeism tend to
be high.
 Contd…
3. Job Satisfaction and Employee Turnover:
Turnover is the voluntary and involuntary permanent withdrawal of employees from an
organization. In other words, it is the process of joining new employees in the
organization and leaving old employees. There is negative correlation between job
satisfaction and employee turnover. When job satisfaction level is high, turnover trend
of employees tend to be low. In such situation employees give importance to their job.
Similarly, when job satisfaction level is low, turnover trend of employees tend to be
high.

4. Job Satisfaction and Organizational Citizenship:

Organizational citizenship is the development of feeling of belongingness and
membership among the employees in the organization. It is discretionary behaviour
that is not a part of an employee’s formal job requirement. There is positive correlation
between job satisfaction and organizational citizenship. Satisfied employees devote
their duties according to their best of ability.
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