Chapter 11: Motivation

Unit 2: People in organisations

 Chapter objectives
On completing this chapter, you will be able to:

§ Understand what motivation is and why motivated workers are important to business
organisations

§ Discuss the important contributions of motivational theorists and their relevance to

businesses today

§ Understand the different methods used to motivate workers in practical business situations

§ Analyse the appropriateness of different payment systems and evaluate their impact on
motivation

§ Assess the role of non-financial methods of motivation and evaluate their impact.
Introducing the topic
A recent employee survey led to the following response rate in answer to the
question: What increases your motivation to work for your company?

Research found that 85% of

employees would be more loyal
if they were praised for their
work and 100% suggested that
they would stay in their jobs
longer if thanked more often
and more effectively
 What is Motivation?
§ Motivation is the desire of the workers to see the job well done and quickly
§ Motivation can come from the internal and external factors
§ Motivated workers:
ü Help an organisation achieve its objectives as cost-effectively as possible
ü Try to reach their own personal goals è Employers need aware of employee’s goals
§ Unmotivated workers:
ü Reluctant to perform effectively and quickly
ü Offer nothing but the absolute minimum of what is expected
 Benefits of well-motivated staff

Low labour
Low absenteeism
turnover
Gains from
well-motivated staff

High productivity Prepared to accept

Make suggestions responsibility
for improvements
Performance by unmotivated staff
 Theories of Motivation
§ These theories focus on the assumption that individuals are motivated by the
desire to fulfil their inner needs.
§ These approaches focus on these human needs that energise and direct
human behaviour and how managers can create conditions that allow
workers to satisfy them.
 F.W Taylor - Scientific Management
§ Reality:
o Workers was untrained and non-specialised
o Workers were poorly led by supervisors and managers with little or no formal
training
o No formal selection or appraisal system of staff, many were recruited on a daily or
weekly basis with no security of employment
o Paid per a fair days work
 F.W Taylor - Scientific Management
§ How to improve output per worker:
1. Select workers to perform a task
2. Observe them performing the task and note the key elements of it.
3. Record the time taken to do each part of the task.
4. Identify the quickest method recorded.
5. Train workers in this quickest method and do not allow them to make any changes
6. Supervise workers to ensure that “best way” is being carried out and time them to
check that the set time is not being exceeded.
7. Pay workers on the basis of results (unit produced) – the theory of economic man.
F.W Taylor - Scientific Management
F.W Taylor’s views and methods are today
Elton Mayo – The human relations theories
§ The Hawthorne effect of Mayo:
ü Changes in working conditions and financial rewards have
little or no effect on productivity
ü When management consult with workers and take an
interest in their work, then motivation is improved
ü Working in teams and developing a team spirit can
improve productivity
ü When some control over their own working lives is given
to workers, there is a positive motivational effect
ü Groups can establish their own targets/ norms and these
can be influenced by the informal leaders of the group.
Elton Mayo – The human relations theories
§ Since Mayo’s work was published, there has been a trend towards more
workers participation
§ Team/ group working can be applied in many ways in modern businesses
§ The idea of involving workers, taking out interest in their welfare opened
new fields of research
§ This development of the ‘people’ side of business has taken industry away
from the engineer-focused and purely money-motivated views of Taylor
 Maslow - The hierarchy of human needs
§ Abraham Maslow’s conclusion: Our needs determine our actions – we will
always try to satisfy them and we will be motivated to do so
§ If work can be organised so that workers can satisfy some or all of the needs
at work è More productive and satisfied.
§ Maslow summarised these human needs in the form of a hierarchy
 Maslow - The hierarchy of human needs
§ Maslow summarised these human needs in the form of a hierarchy

A sense of self-fulfillment reached by feeling enriched and developed

by what one has learned and achieved
Maslow - The hierarchy of human needs
 Limitation of Maslow’s approach
§ Not everyone has the same needs as is assumed by the hierarchy.
§ It can be very difficult to identify the degree to which each need has been met
and which level a worker is on
§ Money is necessary to satisfy physical needs, yet it might also play a role in
satisfying the other levels of needs, such as status and esteem.
§ Self-actualisation is never permanently achieved – as some observers of the
hierarchy have suggested. Jobs must continually offer challenges and
opportunities for fulfilment, otherwise regression will occur.
 Activity 11.1

Suggestion: Both Elton Mayo and Abraham Maslow consider human-centric perspective, but:
§ Mayo's work was more empirical and management-focused
§ While Maslow's was more theoretical and centered on individual psychological needs
 Activity 11.1

Suggestion:
§ Hawthorne: (i) Regular feedback and recognition to employees; (ii) Involving employees in decision-
making processes; (iii) Consistently monitoring employee performance; (iv) Rotating job tasks can keep
employees engaged and motivated.

§ Maslow: (i) Ensure employees' fair wages, safe working conditions through clear communication; (ii)
Encourage teamwork, provide opportunities for social interaction with respect; (iii) Recognize and reward
employees for their achievements and contributions; (iv) Support employees in their personal and
professional growth by offer training and development opportunities, encourage creativity and innovation.
 Herzberg - Two factor theory
§ Job satisfaction resulted from five “motivators”: (1) achievement, (2)
recognition for achievement, (3) the work itself, (4) responsibility, (5)
advancement.
§ The last three to be the most significant.
§ Job dissatisfaction also resulted from five main factors: (1) Company policy
and administration, (2) supervision, (3) salary, (4) relationships with others,
(5) working conditions. He termed these ‘hygiene factors’ which surround
the job itself (extrinsic factors)
§ Hygiene factors had to be addressed by management to prevent
dissatisfaction.
Herzberg - Two factor theory
 Herzberg in today’s perspective
§ Salaries provide movement which is not motivation. Motivation to do the job

and to do it well will exist when motivators are in place.

§ Job enrichment as the motivational factor which may involve:

i. Complete units of work: “give workers a job to do” – worker assemble complete unit
rather than doing a small part in a job thinking of their role as unimportant.

ii. Feedback on performance: recognizing the work well done and further incentivizing

iii. Range of tasks: to challenge and stretch an individual worker

§ Good pay, good working conditions and less supervision will soon be taken

for guaranteed and if the work is not satisfactory => inner needs.
ACTIVITY 11.2
 ACTIVITY 11.2
1.Analysis of Maslow's Hierarchy:
a. Maria: Maria seems to be at a level that corresponds to "Esteem Needs" in Maslow's Hierarchy. She is
self-employed as a market researcher, earning a reasonable income that satisfies her basic needs. She
finds her work interesting and is appreciated by her clients. Her motivation appears to be driven by the
need for self-esteem and self-fulfillment rather than just survival or security.
b. Asif: Asif appears to be at the "Belongingness and Love Needs" level. He enjoys the social aspect of
his job, working with a group of friends and feeling like a part of a team. However, he expresses a desire
for more challenging work and greater recognition, which suggests that his needs in this category are
not fully met.
c. Imran: Imran is at the "Safety Needs" level. His job is temporary, and he has concerns about job
stability, making it difficult for him to focus on higher-level needs. His immediate priority is to find a
more permanent job, which addresses his need for financial security.
 ACTIVITY 11.2
2. Discussion of Asif's Motivation and Herzberg's Factors:
Asif's current level of motivation can be analyzed using Herzberg's Two-Factor Theory, which divides
workplace factors into "Hygiene Factors" and "Motivators."
a. Hygiene Factors: Asif seems to be dissatisfied with his current job due to hygiene factors. Asif's
dissatisfaction is related to: (i) Lack of challenging work: Asif finds his current job not challenging
enough, which is a source of dissatisfaction, and (ii) Lack of recognition: Asif feels that his work is not
appreciated, which also contributes to his dissatisfaction.
b. Motivators: His current job can be enriched with motivators, Asif could be motivated by: (i)
Responsibility: Assigning him more responsibilities or involving him in decision-making processes related
to stock display and product selection could make his job more interesting and fulfilling, and (ii)
Recognition and achievement: Providing regular recognition for his contributions and acknowledging his
role within the team can also enhance his motivation.
 David McClelland – Motivational Needs Theory
§ He described three types of motivational needs:
I. Achievement Motivation (n-ach): A person with strong motivational needs will
attempt challenging goals. There is a constant need to progress and sense of
achievement.
II. Authority/Power Motivation (n-pow): The desire to control others is the dominating
motivating force in such people. There is a strong leadership instinct and being
impactful and authoritative bring prestige and status.
III. Affiliation Motivation (n-affil): The strongest need is good relationship with others
and are motivated towards interaction with others. Such people tend to be good
team members.
David McClelland – Motivational Needs Theory

§ McClelland believed that these three needs are prevailantin all workers and
managers but to varying degrees
§ The mix of motivational needs characterizes the workers and managers
behaviors, both in terms of how they are motivated and what they think will
motivate others
§ He believed that achievement motivated people are generally the ones who
will make things happen but might be over demanding to employees
 Process Theories
§ Process theories emphasise how and why people choose certain behaviours
in order to meet their personal goals and the thought processes that
influence behaviour.
§ A study of all of the main process theories – expectancy theory, equity
theory, goal-setting theory and reinforcement theory – is beyond the scope
of the CIE syllabus and therefore of this book.
§ We consider just one of the best-known process theorists Vroom and
expectancy theory
 Vroom and expectancy theory
§ Individuals tend to behave in ways which they think will derive desired results
§ Individuals have different set of goals and are motivated if they believe:
§ There is a positive link between effort and performance
§ Favourable performance will result in desirable reward
§ The reward will satisfy an important need
§ The desire to satisfy the need is strong enough to make the work effort
worthwhile
 Vroom and expectancy theory
1. Valence: The depth of the want of an employee for an extrinsic reward, such as
money, or an intrinsic reward, such as satisfaction
2. Expectancy: The degree to which people believe that putting effort into work will
lead to a given level of performance
3. Instrumentality: The confidence of employees that they will actually get what
they desire, even if it has been promised by the manager
Ø Even if just one of these conditions or beliefs is missing, then workers will not
have the motivation to do the job well
Ø Managers should try to ensure that employees believe that increased work effort
will improve performance and that this performance will lead to valued rewards
 Summary of motivational theories
• Focuses on optimizing task efficiency and productivity.
F.W. Taylor - • Believed in financial incentives and piece-rate pay to motivate workers.
Scientific Management • Emphasizes control and close supervision to ensure compliance.
• May not consider the social and psychological aspects of motivation.

• Emphasizes the social and psychological needs of employees.

Elton Mayo - The
• Believes that interpersonal relationships, group dynamics, and recognition are important
Human Relations
for motivation.
Theories
• Highlighted the significance of a positive work environment and employee satisfaction.

• Includes physiological, safety, social, esteem, and self-actualization needs.

Abraham Maslow -
• Suggests that individuals are motivated by unmet needs at different levels.
The Hierarchy of
• As lower-level needs are satisfied, higher-level needs become more important.
Human Needs
• Provides a holistic view of motivation and personal development.
 Summary of motivational theories
Frederick • Identifies hygiene factors and motivators as separate factors.
Herzberg – Two- • Hygiene factors can lead to dissatisfaction, while motivators enhance job satisfaction.
Factor Theory • Emphasizes that job enrichment and intrinsic factors are critical for motivation.

David McClelland • Proposed the need for achievement, affiliation, and power as key motivators.
- Motivational • People have different dominant needs, which affect their motivation.
Needs Theory • Highlights the importance of understanding individual needs to motivate effectively.

Victor Vroom - • Posits that individuals are motivated when they believe their efforts will lead to performance,
Expectancy performance will lead to rewards, and rewards are valued.
Theory • It emphasizes the importance of self-efficacy, instrumentality, and valence.
 Summary of motivational theories
In comparison:
• Taylor's Scientific Management and Mayo's Human Relations Theories represent early contrasting views of
motivation, with Taylor focusing on task efficiency and Mayo emphasizing social factors.
• Maslow's Hierarchy of Needs, Herzberg's Two-Factor Theory, and McClelland's Motivational Needs
Theory emphasize different aspects of human needs and intrinsic motivation.
• Process theories provide insights into cognitive processes influencing motivation.
• Vroom's Expectancy Theory shares similarities with other cognitive models by highlighting the importance
of perceived effort-performance-reward relationships.
Overall, the various motivation theories offer different perspectives and tools to understand and improve
employee motivation and job satisfaction, considering both financial and non-financial factors. Managers often
use a combination of these theories to design effective motivational strategies in the workplace.
 Payment of Financial Reward System
§ Salary: annual income that is usually paid on a monthly basis.
§ Time-based/hourly wage rate: payment to a worker made for each period of
time worked, e.g. one hour.
§ Piece rate: a payment to a worker for each unit produced.
§ Commission: a payment to a sales person for each sale made.
§ Bonus: a payment made in addition to the contracted wage or salary
§ Performance related pay: a bonus scheme to reward staff for above-average
work performance
§ Profit sharing: a bonus for staff based on the profits of the business – usually
paid as a proportion of basic salary.
 Fringe benefits
§ Non-cash forms of reward, many alternatives that can be used, including:
company cars
ü free insurance
ü pension schemes
ü private health insurance
ü discounts on company products
ü low interest rate loans.
• In addition to normal payment systems in order to give status to higher-level
employees and to recruit and retain the best staff
• Some fringe benefits are taxed
 Non-financial methods of motivation
§ Job rotation: increasing the flexibility of employees and the variety of work they do
by switching from one job to another.
§ Job enlargement: attempting to increase the scope of a job by broadening or
deepening the tasks undertaken.
§ Job enrichment: a reduction of direct supervision as workers take more
responsibility for their own work and are allowed some degree of decision making
authority
§ Job redesign: involves the restructuring of a job – usually with employees’ involvement
and agreement – to make work more interesting, satisfying and challenging.
§ Training: improving and developing the skills of employees is an important motivator
 Non-financial methods of motivation
• Quality circles: voluntary groups of workers who meet regularly to discuss work-related problems and

issues.

• Worker participation: workers are actively encouraged to become involved in decision-making within

the organisation.

• Team-working: production is organised so that groups of workers undertake complete units of work

• Target setting: people are more likely to do well when they are working towards a goal that they

helped to establish and identify

• Delegation and empowerment: passing down of authority to perform tasks to workers, although

empowerment goes further, by allowing workers some degree of control over how the task should be
undertaken
 Evaluation of payment systems and
non-financial motivational methods
• Pay is not the sole motivator for effective work and job satisfaction.

• Managers should consider both payment and non-financial methods for staff motivation.

• Effectiveness of motivation strategies varies among different worker groups.

• Flexibility is key; adapt methods to business circumstances and workforce.

• Influencing factors: leadership style and organizational culture.

• "Payment by results" and close supervision for a less trusted workforce.

• A culture of partnership and trust leads to salary payment or profit-sharing.

• Senior management attitudes and business culture are pivotal in decision-making.

 SUMMARY POINTS
§ Motivation is the willingness of workers to achieve a good result because they want to do it.

§ Organisations that allow workers to achieve personal goals are more likely to achieve their organisational
goals.

§ Taylor was the first researcher to employ scientific techniques to study workforce efficiency and motivation.

§ Taylor accepted the ‘economic man’ concept and believed that pay was the sole human motivator at work.

§ The Hawthorne effect, as explained by Mayo, stresses the importance of factors other than pay and conditions
in influencing motivation – such as group spirit and communication with managers.

§ Maslow’s hierarchy of human needs is an attempt to classify needs in order of achievement.

§ The desire to satisfy needs drives human behaviour and when one need is fulfilled it no longer motivates.
 SUMMARY POINTS
§ Herzberg’s two-factor theory focuses on the nature of the job itself rather than on external factors, such as
pay, conditions and supervision.

§ No one theorist can claim to have a monopoly on relevant motivational ideas – it is important to recognise that
certain ideas may not be applicable to all workers and in all workplace situations.

§ There are many different pay systems that can be used to reward and motivate staff.

§ Increasing emphasis is being given to non-financial methods of motivation.

§ These recognise that pay is not the main motivational force for many workers.

§ The culture of the organisation and the management style adopted often have a considerable influence on the
forms of motivation used.