Chapter 5

MOTIVATION

Job performance is a given requirement in any organization. It is possible, however, if the

following conditions are met:
1. the capacity to perform
2. the opportunity to perform
3. the willingness to perform
The capacity to perform relates to the degree to which the employee possesses skills,
abilities, knowledge, and experiences relevant to his job. If high performance is expected, the
employee must be fully trained and physically capable of doing his job.
The opportunity to perform will depend on the work environment provided to the
employee. One who works in an office that is hot, humid, and noisy cannot be expected to
perform well. The opportunity to perform is also diminished by lack of equipment, lack of funds,
and insufficient authority.
The willingness to perform relates to the degree in which an employee desires and is
willing to exert effort to achieve the goals assigned to him.
The willingness to perform is also alternately called motivation.

WHAT IS MOTIVATION
People behave differently and one of the reason is that they are motivated differently.
Some are motivated by economic reasons, while some are motivated otherwise. But even those
who are motivated by money will differ in terms of how much they want.
As motivation is one of the requisites of performance, a basic understanding of what
motivation is and how it facilitates the achievement of goals would benefit both managers and
individual employees.
Motivation may be defined as the process of activating behavior, sustaining it, and
directing it toward a particular goal. Motivation moves people to act and accomplish.
In the workplace, motivation may be more specifically defined as the set of internal and
external forces that cause a worker or employee to choose a course of action and engage in a
certain behavior.

KEY ELEMENTS OF MOTIVATION

Motivation consists of the following elements:
1. intensity
2. direction
3. persistence
Intensity refers to the level of effort provided by the employee in the attempt to achieve
the goal assigned to him. In simple terms, intensity refers to how hard a person tries to do work.
The person’s effort could be a full commitment to excellence or doing just enough to get
by. For example, if a company sets a minimum output of 10 units sold per person per month, the
employee whose intensity level of motivation is low will just sell 10 units per month and those
with high levels of motivation would sell more.
 Direction relates to what an individual chooses to do when he is confronted with a
number of possible choices. When a field salesman, for instance, decided to visit a friend instead
of a prospect, he is moving away from the direction his company wants him to take.
Persistence is a dimension of motivation which measures how long a person can maintain
effort to achieve the organization’s goals. A person who scores low in persistence gives up
prematurely. An example relates to what action a salesperson will do when confronted by a
prospect who thinks slowly and do not make hasty decisions. Persistence could be the answer,
but the salesperson could decide otherwise.
In any case, the three elements complement each other. If the intensity of motivation is
insufficient, or the effort is not properly directed or persistent enough, excellent performance is
not just possible.

THEORIES OF MOTIVATION
There are various theories related to motivation. They may be classified as either (1)
content, or (2) process theories.
Content theories are those that focus on analyzing the wants and needs of an individual.
The four better known content theories are the following:
1. Hierarchy of Needs Theory of Abraham Maslow
2. ERG Theory of Clayton Alderfer
3. Acquired Needs Theory of David L. McClelland
4. Two-factor Theory of Frederick Herzberg
Process theories explain how people act in response to the wants and needs that they
have. Classified under process theories are the following:
1. Expectancy Theory of Victor Vroom
2. Equity Theory of J. Stacey Adams
3. Goal Setting Theory of Edwin A. Locke

THE HIERARCHY OF NEEDS THEORY

Abraham Maslow forwarded the idea that human beings possess a hierarchy of five needs
(physiological, safety, social, esteem, and self-actualization) such that as each need is
substantially satisfied, the next need becomes dominant.
A brief description of the needs is provided as follows:
1. Physiological needs – which include hunger, thirst, shelter, sex, and other bodily
needs.
2. Safety needs – which include security and protection from physical and emotional
harm.
3. Social needs – which include affection, belongingness, acceptance, and
friendship.
4. Esteem needs – which include internal esteem factors such as self-respect,
autonomy, and achievement, and external esteem factors such as status,
recognition, and attention.
5. Self-actualization – refers to the drive to become what one is capable of
becoming, which includes growth, achieving one’s potential, and self-
fulfillment.
If Maslow’s theory really gives clue to motivating people, managers and supervisors
would do well in their jobs if they concentrate on satisfying an individual’s next level of need,
i.e., if the current need level is already satisfied. For instance, if an employee already feels
satisfied with his physiological needs, then he can be expected to perform better if his safety
needs are taken care of. Figure 18 is an illustration of Maslow’s hierarchy of needs theory.

THE ERG THEORY

The ERG theory is a need hierarchy theory of motivation that was developed by Clayton
Alderfer. He believed that in motivating people, we are confronted by three sets of needs:
existence (E), relatedness (R), and growth (G).
These sets of needs may be briefly described as follows:
1. Existence – this refers to needs satisfied by such factors as food, air, water, pay,
and working conditions;
2. Relatedness – this refers to the needs satisfied by meaningful social and
interpersonal relationships; and
3. Growth – this refers to the needs satisfied by an individual making creative or
productive contributions.
Alderfer, like Maslow, also believed that individuals progress up the hierarchy of needs
as a result of the satisfaction of lower order needs. But he maintained, however, that if a higher
order need cannot be satisfied, a lower order need becomes dominant as a motivating factor. For
example, if growth cannot be attained, the individual will regress to relatedness as a motivator.
Alderfer also thought that, unlike Maslow, more than one need may be activated at the
same time.

ACQUIRED NEEDS THEORY

Acquired needs theory was developed as a result of a research made by David
McClelland and his associates. They found out that managers are motivated by three
fundamental needs which may be briefly described as follows:
1. need for achievement – this refers to the desire to do something better or more
efficiently, to solve problems, or to master complex tasks;
2. need for affiliation – which refers to the desire to establish and maintain friendly
and warm relations with other; and
3. need for power – which refers to the desire to control others, to influence their
behavior, or to be responsible for others.
McClelland believed that the foregoing needs are acquired over time as a result of life
experiences.
His research finding consist of the following:
1. People who have high achievement needs have the drive to advance and to
overcome challenging situations such as those faced by entrepreneurs in
introducing innovative new business;
2. An affiliation motivated person prefers to work with friends;
3. The need for power drives successful managers.
THE TWO-FACTOR THEORY
Frederick Hezberg developed his two-factor theory that identifies job context as source of
job dissatisfaction and job content as the source of job satisfaction and job content as the source
of job satisfaction.
The job context or work setting relates more to the environment in which people work.
The factors associated with job context are called hygiene factors which include the following:
1. organizational policies
2. quality of supervision
3. working conditions
4. base wage or salary
5. relationship with peers
6. relationship with subordinates
7. status
8. security

According to the two-factor theory, improving any of the hygiene factors will not make
people satisfied with their work; it will only prevent them from being dissatisfied.
The job content relates more to what people actually do in their work. Those that are
related to job content are called motivator factors and they consist of the following:
1. achievement
2. recognition
3. work itself
4. responsibility
5. advancement
6. growth
According to the two-factor theory, when the foregoing factors are not present, there is
low job satisfaction among workers and there is lack of motivation to perform.

EXPECTANCY THEORY
One of the process theories refer to the expectancy theory that was developed by Victor
Vroom. This theory sees people as choosing a course of action according to what they anticipate
will give them the greatest rewards.
Vroom elaborated by explaining the motivation is a product of the following factors:
1. valence – how much one wants a reward;
2. expectancy – one’s estimate of the probability that effort will result in successful
performance; and
3. instrumentality – one’s estimate that performance will result in receiving the
reward.
The three factors are useful in deriving motivation. The formula is as follows:
Valence x Expectancy x Instrumentality = Motivation

Expectancy theory predicts that motivation will be high if all the three factors are rated
high. Conversely, the lower the rate for any or all of the three factors, the lower the motivation
becomes.
EQUITY THEORY
Equity theory is the second process theory presented in this chapter. It may be defined as
a theory that individuals compare job inputs and outcomes with those of others and then respond
to eliminate inequities.
Equity theory assumes that employees are motivated by a desire to be equitably treated at
work. Equity exists when employees perceive that the ratios of their inputs (or efforts) to their
outputs (or rewards) are equivalent to the ratios of other employees. Inequity exists when these
ratios are not equivalent.
Inequity leads to the experience of tension, and tension motivates a person to act in a
manner to resolve the inequity. The person, however, will be confronted with any of the two
types of inequity:
1. over rewarded; or
2. under rewarded.
Employees who feel over rewarded will think there is an imbalance in their relationship
with their employer. They will seek to restore the balance through any of the following:
1. they might work harder;
2. they might discount the value of the rewards;
3. they could try to convince other employees to ask for more rewards; and
4. they might choose someone else for comparison purposes.
When employees feel under rewarded, they will seek to reduce their feelings of eniquity
through any of the following:
1. they might lower the quality or quantity of their productivity;
2. they could inflate the perceived value of the rewards received;
3. they could find someone else to compare themselves;
4. they could bargain for more rewards; and
5. they might quit.

GOAL SETTING THEORY

The third process theory presented in this chapter is the goal setting theory. It may be
defined as the theory that specific and difficult goals, with feedback lead to higher performance.
Goal setting theory is based on the premise that behavior is regulated by values and goals.
A goal is the specific target that an individual is trying to achieve.
It was Edwin A. Locke and his associates who developed a comprehensive framework
linking goals to performance. Their findings about goals include the following:
1. Specific goals lead to a higher performance than generalized goals. For example,
a specific goal like “increase sales by 10%” is more effective than a generalized goal like
“increase sales”.
2. Performance generally increases in direct proportion to goal difficulty. Goals that
are difficult to achieve is regarded as a challenge to the ability of the person. This pushes him or
her to perform. Exceptions, of course, are goals that are too difficult, and the person gets
frustrated rather than inspired.
3. For goals to improve performance, they must be accepted by the workers. It is
logical that when goals are accepted, workers feel that they should achieve them. Acceptance and
commitment to goals happen when workers participate in the setting of goals. The workers will
feel that they are “part owner” of the goals, and they will have a sense of achieving them.
4. Goals are more effective when they are used to evaluate performance. This is true
especially if performance is used to determine rewards.
5. Goals should be linked to feedback. When workers receive feedback, they will
know whether or not they are moving towards the direction of high performance. Such
knowledge is important in maintaining the right motivation to work.

MOTIVATIONAL METHODS AND PROGRAMS

It is normal for employers to want their employees to do their best in the workplace. For
employers, the ideal situation is for employees to perform excellence work, and thus produce
maximum output. This is wishful thinking, however, because employees need a certain degree of
motivation to perform very well. To keep employee sufficiently motivated, some means of
motivation should be designed and implemented.
Four motivational methods and programs are considered in this chapter.
They are as follows:
1. motivation through job design;
2. organizational behavior modification;
3. motivation through recognition and pride; and
4. motivation through financials incentives.

MOTIVATION THROUGH JOB DESIGN

One way of motivating employees is to make their job challenging so that the worker
who is responsible for it enjoys doing it. This management activity is called job design, when it
is undertaken; some useful benefits will accrue to the organization.
Job design may be defined as the way the elements in a job are organized.
Three concepts are important in designing jobs. They consist of the following:
1. job enrichment
2. job characteristics model
3. job crafting

JOB ENRICHMENT
This term refers to the practice of building motivating factors like responsibility,
achievement and recognition into job content. Job enrichment provides the worker with a more
exciting job and it increases his job satisfaction and motivation.
An enriched job has any or all of the following characteristics:
1. Direct feedback – which means employees receive immediate evaluation of their
work.
2. Client relationships – which means an employee is given a chance to serve an
external or internal client.
3. New learning – which means that the employee acquires new knowledge while
doing his work.
4. Control over method – which means that the employee has some control over
which method to choose to accomplish a task.
5. Control over scheduling – which means the employee has the ability to schedule
his work.
 6. Unique experience – which means the job has unique qualities or features, like the
opportunity to see the world.
7. Direct communication authority – which means the job provides the employee the
opportunity to communicate directly with people who use their output.
8. Control over resources – which means the employee has some control over
resources such as money, material, or people.
9. Personal accountability – which means the employee is responsible for his or her
result. He accepts credits for doing a good job, and blame for a poor job.

Job Characteristics Model

This term refers to the method of job design that focuses on the task and interpersonal
demands of a job. This method emphasizes the interaction between the individual and the
specific attributes of the job.
The job characteristics theory maintains that there are five core job characteristics of
special importance to job design. When these core job characteristics are high, the job is said to
be enriched.
The five core job characteristics are defined as follows:
1. Skill variety – the degrees to which there are many skills to perform. An example
of a job scoring high on skill variety would be the master carpenter who makes and install doors,
door jambs, cabinets, wooden floors, tables, chairs, toys, upholstery, and the like. An example of
a job scoring low on skill variety is the worker who installs bricks eight hours a day.
2. Task identity – the degree to which one worker is able to do a complete job, from
beginning to end, with the tangible and possible outcome. An example of a job scoring high on
identity would be a guitar maker who designs the product, select the materials builds the object
and finishes it to be a fine musical instrument. A job scoring low on the task identity dimensions
would be a person whose job is solely to play the electric bass in a live band performance.
3. Task significance – the degree to which the job has a substantial impact on the
lives or work of other people. An example of a job scoring high on task significance would be a
close-in bodyguard who protects the president of a nation. A job scoring low on this dimension
would be a dishwasher in a restaurant.
4. Autonomy – the degree which the job gives the employee substantial freedom,
independence, and discretion in scheduling the work and determining the procedures used in
carrying it out. An example of a job scoring high on autonomy is a bus inspector who schedules
his or her own work and decides on the most effective means of checking the work of drivers and
conductors assigned to him or her. A job scoring low on autonomy would be a bank teller who is
required to follow a standardized procedure with each bank client.
5. Feedback – the degree to which a job provides direct information about
performance. An example of a job with high feedback is an electrician who installs electric
wirings at residences and then tests them for the homeowner to see if they operate properly. A jo
scoring low on feedback would be a university professor who receives performance feedback
many months after handling a class.

Job Crafting
This refers to the physical and mental changes workers make in the task or relationship
aspect of their jobs.
The common types of job crafting are:
 1. changing the number and type of job tasks;
2. changing the interaction with others on the job; and
3. changing one’s view of the job.

ORGANIZATIONAL BEHAVIOR MODIFICATION

The second method of motivation is called organizational behavior modification (OB
Mod). It is actually the application of reinforcement theory in motivating people at work.
Reinforcement theory may be briefly defined as the contention that behavior is
determined by its consequences. Simply stated, a person tends to repeat behavior that is
accompanied by favorable consequences and tends not to repeat behavior that is accompanied by
unfavorable consequences.
The typical OB Mod program consists of a five-step problem-solving model. These are as
follows:
1. Identifying critical behaviors that make a significant impact on the employee’s
job performance;
2. Developing baseline data which is obtained by determining the number of times
the identified behavior is occurring under present conditions;
3. Identifying behavioral consequences of performance;
4. Developing and implementing an intervention strategy to strengthen desirable
performance behaviors and weaken undesirable behaviors; and
5. Evaluating performance improvement.

Among the benefits of OB Modification are:

1. improvement of employee productivity;
2. reduction of errors, absenteeism, tardiness, and accident rates; and
3. improvement of friendliness toward customers.

MOTIVATION THROUGH RECOGNITION AND PRIDE

Recognition is a natural human need and it is a strong motivator. To make it an effective
motivator, the following steps are necessary:
1. Identify a meritorious behavior (for example, the development of a scheme that
reduces the cost of providing service to customers); and
2. Recognize the behavior with an oral, written, or material reward. For example, the
equivalent of 10% of the cost savings will be given to the worker who developed the scheme
every time the savings is realized.

For a better understanding and implementation of reward and recognition programs, the
following points must be considered:
1. Feedback is an essential part of recognition;
2. Praise is one of the most powerful forms of recognition;
3. Reward and recognition programs should be limited to organizational goals;
4. Identification of the type of rewards and recognition that the workers will value;
and
5. It is important to evaluate the effectiveness of the reward and recognition
program.
 Pride is also a motivator, but one that is intrinsic. Workers who achieve outstanding
performance experience the emotion of pride. The feeling satisfies the need for self-esteem and
self-fulfillment. This provides managers with a clue on what concrete actions could be done to
motivate workers.

MOTIVATION THROUGH FINANCIAL INCENTIVES

Financial incentives are powerful tools of motivation. They are monetary rewards paid to
employees because of the output they produce, skills, knowledge, and competencies or a
combination of these factors.
Financial incentives take the form of any or a combination of the following:
1. time rates
2. payment by results
3. performance and profit related pay
4. skill/competency based pay
5. cafeteria or flexible benefits system

Each of the foregoing financial incentives offers unique advantages although there are
also some disadvantages when they are used to motivate employees.

Time rates
This type of monetary reward use the number of hours worked as a means of determining
rewards. It may be classified as hourly rate, or weekly wage, or a monthly salary.
The advantages of time rates are as follows:
1. It is open to inspection and equitable because employees doing the same job will
be on the same grade level.
2. It encourages the retention of human resources by stability and this is because of
the gradual increases in rewards within the given grades.
3. It is relatively easy to administer and allows labor cost to be predicted.
4. It does not emphasize quantity of output to the detriment of quality.

The main disadvantage of time rates is that it does not motivate employees to become
more productive.

Payment by Results
This scheme links pay to the quantity of the individual’s output. An example is the
commission paid to a salesman for selling the company’s products.

The advantages of payment by results are the following:

1. The employee is motivated to put in extra effort because by doing so, he or she
will receive additional income;
2. There is fairness because the level of reward is related to the level of output; and
3. There are likely to be cost advantages since wages are directly linked to
production and less supervision is required.

The disadvantages of payment by results are as follows:

 1. Outputs in certain jobs cannot be easily measured;
2. Safety standards may be compromised. For instance, the high rate of accidents
involving bus drivers who are paid commissions is sufficient proof of the
disadvantage of payment by results; and
3. workers may view payment by results as a device to obtain greater effort from
them without commensurate rewards.

PERFORMANCE RELATED PAY

This scheme considers results or output plus actual behavior in the job. Most often,
rewards consist of a lump sum, or a bonus as a percentage of basic salary, with quality of
performance determining the magnitude of the percentage increase, or alternatively accelerated
movement up a pay scale. The bonus is a reward given to employees for recent performance
rather than historical performance.

The advantages of performance related pay are as follows:

1. It increases employee beliefs (instrumentality) that reward will follow high
performance;
2. Those that perform better are rewarded more; and
3. It is comparatively objective and verifiable.

The disadvantages are as follows:

1. cost rises along with the rewards;
2. the system is complex;
3. employees with declining energy may experience a decrease in total pay;
4. the union may resist the incentive idea;
5. there is delay in the payment of incentives;
6. the system is rigid; and
7. it is difficult to motivate higher performance across a broad range of employees.

Profit Related Pay

This is an organization wide scheme where pay is linked to company profits. Profit
related pay takes the form of direct cash outlay, or allocation of stock options.
Stock option is a financial incentive that gives employees the right to purchase a certain
number of company shares at a specified price, generally the market price of the stock on the day
the option is granted.

The following are the advantages of profit related pay:

1. Employees identify more closely with the success of the organization;
2. There is a breaking down or removal of the communication barrier between
management and employees;
3. Cooperation and working together for mutual benefit is encouraged;
4. Awareness of the link between performance and organizational profitability leads
to a greater awareness of cost and their impact on performance;
5. When profits fall, the decline in pay is a preferable alternative to laying off
employees; and
6. Group pressure could raise the performance levels of poor performers.
 The disadvantages of profit related pay are as follows:
1. Profits are not directly related to an employee’s effort on the job, and this is a
negative factor on motivation;
2. Employees must wait for their reward, and the delay diminishes its impact; and
3. Since profits are unpredictable, total worker income may vary from year to year.
As a result, some workers may prefer the stability of a fixed wage or
salary.

SKILL BASED PAY

Also known as competency based or knowledge based pay, this is a pay plan that sets pay
levels on the basis of how many skills employees have or how many jobs they can do:
The advantages of the skill based pay are the following:
1. It provides strong motivation for employees to develop their work-related skills;
2. It reinforces an employee’s sense of self-esteem; and
3. It provides the organization with a highly flexible workforce that can fill in when
someone is absent.

The disadvantages are as follows:

1. Since most employees will voluntarily learn higher-level jobs, the average hourly
pay rate will be greater than normal;
2. A substantial investment in employee training must be made especially in the time
spent coaching by supervisors and peers;
3. Not all employees like skill based pay because it places pressure on them to move
up the skill ladder; and
4. Some employees will qualify themselves for skill areas that they will unlikely use,
causing the organization to pay them higher rates than they deserve.

CAFETERIA OR FLEXIBLE BENEFIT SYSTEM

This is a benefit plan that allows each employee to put together a benefit package
individually tailored to his or her own needs and situation. Example of benefits that may be
included in the plan are health and life insurance, company car, additional holiday entitlement,
membership to social clubs, modification of working hours, special pension arrangement,
mortgage loan subsides, and others.

The advantages of this plan are as follows:

1. It enables employees to choose options that best fit their own needs. Old workers,
for instance, may choose health and life insurance, while the younger ones
may choose membership to social clubs.
2. Deciding among the various options makes employees more aware of the benefits,
giving them a real sense of the value of the benefits their employers provide.
3. Flexible benefit plans can lower compensation costs because employers no longer
have to pay for unwanted benefits.
4. Employers and employees can save on taxes.

The disadvantages of the plan are as follows:

1. It creates an administrative burden.
2. It can lead to the increased insurance premiums