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Abraham Maslow's Hierarchy of Needs motivational model

Abraham Maslow developed the Hierarchy of Needs model in 1940-50s USA, and the Hierarchy of Needs theory remains valid today for understanding human motivation, management training, and personal development. Indeed, Maslow's ideas surrounding the Hierarchy of Needs concerning the responsibility of employers to provide a workplace environment that encourages and enables employees to fulfil their own unique potential (self-actualization) are today more relevant than ever. Abraham Maslow's book Motivation and Personality, published in 1954 (second edition 1970) introduced the Hierarchy of Needs, and Maslow extended his ideas in other work, notably his later book Toward A Psychology Of Being, a significant and relevant commentary, which has been revised in recent times by Richard Lowry, who is in his own right a leading academic in the field of motivational psychology. Abraham Maslow was born in New York in 1908 and died in 1970, although various publications appear in Maslow's name in later years. Maslow's PhD in psychology in 1934 at the University of Wisconsin formed the basis of his motivational research, initially studying rhesus monkeys. Maslow later moved to New York's Brooklyn College. The Maslow's Hierarchy of Needs five-stage model below (structure and terminology - not the precise pyramid diagram itself) is clearly and directly attributable to Maslow; later versions of the theory with added motivational stages are not so clearly attributable to Maslow. These extended models have instead been inferred by others from Maslow's work. Specifically Maslow refers to the needs Cognitive, Aesthetic and Transcendence (subsequently shown as distinct needs levels in some interpretations of his theory) as additional aspects of motivation, but not as distinct levels in the Hierarchy of Needs. Where Maslow's Hierarchy of Needs is shown with more than five levels these models have been extended through interpretation of Maslow's work by other people. These augmented models and diagrams are shown as the adapted seven and eight-stage Hierarchy of Needs pyramid diagrams and models below. There have been very many interpretations of Maslow's Hierarchy of Needs in the form of pyramid diagrams. The diagrams on this page are my own interpretations and are not offered as Maslow's original work. Interestingly in Maslow's book Motivation and Personality, which first introduced the Hierarchy of Needs, there is not a pyramid to be seen. Free Hierarchy of Needs diagrams in pdf and doc formats similar to the image below are available from this page.

click to enlarge (N.B. The word Actualization/Actualisation can be spelt either way. Z is preferred in American English. S is preferred in UK English. Both forms are used in this page to enable keyword searching for either spelling via search engines.)

maslow's hierarchy of needs

Each of us is motivated by needs. Our most basic needs are inborn, having evolved over tens of thousands of years. Abraham Maslow's Hierarchy of Needs helps to explain how these needs motivate us all. Maslow's Hierarchy of Needs states that we must satisfy each need in turn, starting with the first, which deals with the most obvious needs for survival itself.

Only when the lower order needs of physical and emotional well-being are satisfied are we concerned with the higher order needs of influence and personal development. Conversely, if the things that satisfy our lower order needs are swept away, we are no longer concerned about the maintenance of our higher order needs. Maslow's original Hierarchy of Needs model was developed between 1943-1954, and first widely published in Motivation and Personality in 1954. At this time the Hierarchy of Needs model comprised five needs. This original version remains for most people the definitive Hierarchy of Needs.

maslow's hierarchy of needs - free pdf diagram and free doc diagram
1. Biological and Physiological needs - air, food, drink, shelter, warmth, sex, sleep, etc. 2. Safety needs - protection from elements, security, order, law, limits, stability, etc. 3. Belongingness and Love needs - work group, family, affection, relationships, etc. 4. Esteem needs - self-esteem, achievement, mastery, independence, status, dominance, prestige, managerial responsibility, etc. 5. Self-Actualization needs - realising personal potential, self-fulfillment, seeking personal growth and peak experiences.

This is the definitive and original Maslow's Hierarchy of Needs. While Maslow referred to various additional aspects of motivation, he expressed the Hierarchy of Needs in these five clear stages. Here is a quick simple self-test based on the original Maslow's 5-level Hierarchy of Needs. It's not a scientific or validated instrument - merely a quick indicator, which can be used for selfawareness, discussion, etc.

1970s adapted hierarchy of needs model, including cognitive and aesthetic needs - free pdf diagram and free doc diagram
1. Biological and Physiological needs - air, food, drink, shelter, warmth, sex, sleep, etc.

2. Safety needs - protection from elements, security, order, law, limits, stability, etc. 3. Belongingness and Love needs - work group, family, affection, relationships, etc. 4. Esteem needs - self-esteem, achievement, mastery, independence, status, dominance, prestige, managerial responsibility, etc. 5. Cognitive needs - knowledge, meaning, etc. 6. Aesthetic needs - appreciation and search for beauty, balance, form, etc. 7. Self-Actualization needs - realising personal potential, self-fulfillment, seeking personal growth and peak experiences.

N.B. Although Maslow referred to additional aspects of motivation, 'Cognitive' and 'Aesthetic', he did not include them as levels or stages within his own expression of the Hierarchy of Needs.

1990s adapted hierarchy of needs including transcendence needs - free diagram and free doc diagram
1. Biological and Physiological needs - air, food, drink, shelter, warmth, sex, sleep, etc. 2. Safety needs - protection from elements, security, order, law, limits, stability, etc. 3. Belongingness and Love needs - work group, family, affection, relationships, etc. 4. Esteem needs - self-esteem, achievement, mastery, independence, status, dominance, prestige, managerial responsibility, etc. 5. Cognitive needs - knowledge, meaning, etc. 6. Aesthetic needs - appreciation and search for beauty, balance, form, etc. 7. Self-Actualization needs - realising personal potential, self-fulfillment, seeking personal growth and peak experiences. 8. Transcendence needs - helping others to achieve self actualization.

N.B. Although Maslow referred to additional aspects of motivation, 'Cognitive', 'Aesthetic', and 'Transcendence', he did not include any of these as additional stages in the Hierarchy of Needs.

Here is a quick self-test based on the extended 8-level Hierarchy of Needs. Like the 5-level Hierarchy of Needs self-test it is not a scientific or validated instrument - merely a quick indicator for helping self-awareness, discussion, etc.

what hierarchy of needs model is most valid?

Abraham Maslow created the original five level Hierarchy of Needs model, and for many this remains entirely adequate for its purpose. The seven and eight level 'hierarchy of needs' models are later adaptations by others, based on Maslow's work. Arguably, the original five-level model includes the later additional sixth, seventh and eighth ('Cognitive', 'Aesthetic', and 'Transcendence') levels within the original 'Self-Actualization' level 5, since each one of the 'new' motivators concerns an area of self-development and self-fulfilment that is rooted in selfactualization 'growth', and is distinctly different to any of the previous 1-4 level 'deficiency' motivators. For many people, self-actualizing commonly involves each and every one of the newly added drivers. As such, the original five-level Hierarchy of Needs model remains a definitive classical representation of human motivation; and the later adaptations perhaps serve best to illustrate aspects of self-actualization.

Maslow said that needs must be satisfied in the given order. Aims and drive always shift to next higher order needs. Levels 1 to 4 are deficiency motivators; level 5, and by implication 6 to 8, are growth motivators and relatively rarely found. The thwarting of needs is usually a cause of stress, and is particularly so at level 4. Examples in use: You can't motivate someone to achieve their sales target (level 4) when they're having problems with their marriage (level 3). You can't expect someone to work as a team member (level 3) when they're having their house re-possessed (level 2).

maslow's self-actualizing characteristics

keen sense of reality - aware of real situations - objective judgement, rather than subjective see problems in terms of challenges and situations requiring solutions, rather than see problems as personal complaints or excuses need for privacy and comfortable being alone

reliant on own experiences and judgement - independent - not reliant on culture and environment to form opinions and views not susceptible to social pressures - non-conformist democratic, fair and non-discriminating - embracing and enjoying all cultures, races and individual styles socially compassionate - possessing humanity accepting others as they are and not trying to change people comfortable with oneself - despite any unconventional tendencies a few close intimate friends rather than many surface relationships sense of humour directed at oneself or the human condition, rather than at the expense of others spontaneous and natural - true to oneself, rather than being how others want excited and interested in everything, even ordinary things creative, inventive and original seek peak experiences that leave a lasting impression

See the Maslow interviews DVDs - especially Maslow and Self-Actualization to understand the subject more fully. These films were made in 1968 and are helpful on several levels, and both wonderful teaching and learning aids. See also the newer Maslow MP3 talks series. These materials also help to illustrate the far-reaching and visionary nature of Maslow's thinking, several decades ago. The above materials are published by Maurice Bassett on behalf of the estate of Abraham Maslow. Businessballs takes no commission and recommends them simply because they are wonderful materials for all students and followers of Maslow's very special work.

maslow's hierarchy of needs in advertising

To help with training of Maslow's theory look for Maslow's Hierarchy of Needs motivators in advertising. This is a great basis for Maslow and motivation training exercises: 1. Biological and Physiological needs - wife/child-abuse help-lines, social security benefits, Samaritans, roadside recovery. 2. Safety needs - home security products (alarms, etc), house an contents insurance, life assurance, schools. 3. Belongingness and Love needs - dating and match-making services, chat-lines, clubs and membership societies, Macdonalds, 'family' themes like the old style Oxo stock cube ads. 4. Esteem needs - cosmetics, fast cars, home improvements, furniture, fashion clothes, drinks, lifestyle products and services.

5. Self-Actualization needs - Open University, and that's about it; little else in mainstream media because only 2% of population are self-actualizers, so they don't constitute a very big part of the mainstream market. You can view and download free Maslow's Hierarchy of Needs diagrams, and two free Hierarchy of Needs self-tests, based on the original Maslow's five-stage model and later adapted eight-stage model, ideal for training, presentations and project work, at the businessballs free online resources section. Free diagrams include:

Pyramid diagram based on Maslow's original five-level Hierarchy of Needs (1954). Adapted seven-level Hierarchy of Needs diagram (which seems to have first appeared in the 1970s - after Maslow's death). Adapted eight-level Hierarchy of Needs diagram (appearing later, seemingly 1990s).

interpreting behaviour according to maslow's hierarchy of needs

Maslow's Hierarchy of Needs is an excellent model for understanding human motivation, but it is a broad concept. If you are puzzled as to how to relate given behaviour to the Hierarchy it could be that your definition of the behaviour needs refining. For example, 'where does 'doing things for fun' fit into the model? The answer is that it can't until you define 'doing things for fun' more accurately. You'd need to define more precisely each given situation where a person is 'doing things for fun' in order to analyse motivation according to Maslow's Hierarchy, since the 'fun' activity motive can potentially be part any of the five original Maslow needs. Understanding whether striving to achieve a particular need or aim is 'fun' can provide a helpful basis for identifying a Maslow driver within a given behaviour, and thereby to assess where a particular behaviour fits into the model:

Biological - health, fitness, energising mind and body, etc. Safety - order and structure needs met for example by some heavily organised, structural activity Belongingness - team sport, club 'family' and relationships Esteem - competition, achievement, recognition Self-Actualization drivers - challenge, new experiences, love of art, nature, etc.

However in order to relate a particular 'doing it for fun' behaviour the Hierarchy of Needs we need to consider what makes it 'fun' (i.e., rewarding) for the person. If a behaviour is 'for fun', then consider what makes it 'fun' for the person - is the 'fun' rooted in 'belongingness', or is it

from 'recognition', i.e., 'esteem'. Or is the fun at a deeper level, from the sense of self-fulfilment, i.e., 'self-actualization'. Apply this approach to any behaviour that doesn't immediately fit the model, and it will help you to see where it does fit. Maslow's Hierarchy of Needs will be a blunt instrument if used as such. The way you use the Hierarchy of Needs determines the subtlety and sophistication of the model. For example: the common broad-brush interpretation of Maslow's famous theory suggests that that once a need is satisfied the person moves onto the next, and to an extent this is entirely correct. However an overly rigid application of this interpretation will produce a rigid analysis, and people and motivation are more complex. So while it is broadly true that people move up (or down) the hierarchy, depending what's happening to them in their lives, it is also true that most people's motivational 'set' at any time comprises elements of all of the motivational drivers. For example, self-actualizers (level 5 - original model) are mainly focused on self-actualizing but are still motivated to eat (level 1) and socialise (level 3). Similarly, homeless folk whose main focus is feeding themselves (level 1) and finding shelter for the night (level 2) can also be, albeit to a lesser extent, still concerned with social relationships (level 3), how their friends perceive them (level 4), and even the meaning of life (level 5 - original model). Like any simple model, Maslow's theory not a fully responsive system - it's a guide which requires some interpretation and thought, given which, it remains extremely useful and applicable for understanding, explaining and handling many human behaviour situations.

maslow's hierarchy of needs and helping others

There are certainly some behaviours that are quite tricky to relate to Maslow's Hierarchy of Needs. For example: Normally, we would consider that selflessly helping others, as a form of personal growth motivation, would be found as part of self-actualisation, or perhaps even 'transcendence' (if you subscribe to the extended hierarchy). So how can we explain the examples of people who seem to be far short of self-actualising, and yet are still able to help others in a meaningful and unselfish sense? Interestingly this concept seems to be used increasingly as an effective way to help people deal with depression, low self-esteem, poor life circumstances, etc., and it almost turns the essential Maslow model on its head: that is, by helping others, a person helps themselves to improve and develop too.

The principle has also been applied quite recently to developing disaffected school-children, whom, as part of their own development, have been encouraged and enabled to 'teach' other younger children (which can arguably be interpreted as their acting at a self-actualising level selflessly helping others). The disaffected children, theoretically striving to belong and be accepted (level 3 - belongingness) were actually remarkably good at helping other children, despite their own negative feelings and issues. Under certain circumstances, a person striving to satisfy their needs at level 3 - belongingness, seems able to self-actualise - level 5 (and perhaps beyond, into 'transcendence') by selflessly helping others, and at the same time begins to satisfy their own needs for belongingness and selfesteem. Such examples demonstrate the need for careful interpretation and application of the Maslow model. The Hierarchy of Needs is not a catch-all, but it does remain a wonderfully useful framework for analysing and trying to understand the subtleties - as well as the broader aspects of human behaviour and growth.

self-actualisation, employees and organisations

Maslow's work and ideas extend far beyond the Hierarchy of Needs. Maslow's concept of self-actualisation relates directly to the present day challenges and opportunities for employers and organisations - to provide real meaning, purpose and true personal development for their employees. For life - not just for work. Maslow saw these issues fifty years ago: the fact that employees have a basic human need and a right to strive for self-actualisation, just as much as the corporate directors and owners do. Increasingly, the successful organisations and employers will be those who genuinely care about, understand, encourage and enable their people's personal growth towards self-actualisation - way beyond traditional work-related training and development, and of course way beyond old-style X-Theory management autocracy, which still forms the basis of much organised employment today. The best modern employers and organisations are beginning to learn at last: that sustainable success is built on a serious and compassionate commitment to helping people identify, pursue and reach their own personal unique potential. When people grow as people, they automatically become more effective and valuable as employees.

In fact virtually all personal growth, whether in a hobby, a special talent or interest, or a new experience, produces new skills, attributes, behaviours and wisdom that is directly transferable to any sort of job role. The best modern employers recognise this and as such offer development support to their staff in any direction whatsoever that the person seeks to grow and become more fulfilled.

classic 1968 maslow interviews now on dvd

Both filmed in 1968, after Maslow's heart attack, and obviously prior to his death in 1970, these superb Maslow DVDs show Dr Maslow being interviewed, respectively by Dr Everett Shostrom, and also interestingly, Warren Bennis. Both films - available here - were made in 1968 and were remastered in black and white in 2007. The remarkable content, and the 1960s styling and production add to the seductive and powerful effect of these films, which stems chiefly from Maslow's brilliant thinking and natural charismatic presence. Being Abraham Maslow is half an hour long, and features Maslow talking to Warren Bennis about his life, his views of the world and his work. It is utterly compelling and shows Maslow's staggering perception of the issues which challenge society and humankind today - and this was recorded in 1968. The film, basically irresistible throughout, includes some marvelous moments, such as Maslow's questioning observation as to "...how good a human nature does society permit?...", and the visionary statement that: "...The Good Society now has to be one world - it has to be one world or it won't work - nationalism is dead - it just doesn't know it yet..." He said this in 1968 and still today our leaders don't see it. Maslow and Self-Actualization is an hour long, in two parts, in which Maslow is interviewed by Dr Everett Shostrom about Self-Actualization, in which Shostrom uses references and quotes extracts from Maslow's book Motivation and Personality, and Maslow explains and develops the themes. The structure is excellent - ideal for teaching and training. Self-Actualization is presented by Maslow through a series of answers, working through the concept in four sections: honesty, awareness, freedom and trust. Maslow brings these headings to life, conveying some very complex intangible ideas - such as objectivity, detachment, maturity, love, acceptance, modesty and grace - in the most understandable way. Personally this video is one of the most powerful things I've ever seen. The film can be used as a teaching aid, and/or as the presenter suggests, to help people understand Self-Actualization as goals or values to aspire to: "...ideas for living and being, fully functioning to one's full capacity..."

For anyone teaching or studying motivation, psychology, Maslow, and related areas - or simply interested in living a fulfilled and good life - these films will be fascinating, and for some people deeply inspirational too. Both films are available here. In terms of format/compatibility, these US-made films wouldn't play on my (cheap) UK DVD player, but they ran happily on my (cheap) UK PC. The above dvd materials are published by Maurice Bassett on behalf of the estate of Abraham Maslow.

additional maslow talks now on mp3

In August 2009 further exciting Maslow material became available for download in mp3 format after extensive work by publisher Maurice Bassett. Volumes One and Two include a total of 28 and a half hours of Abraham Maslow's talks and workshops at the Esalen Institute, Big Sur, California, from the mid and late-1960s. The materials comprise: Volume One: Self-Actualization (1 mp3 file, total playing time 1 hour) Psychology and Religious Awareness (1 mp3 file, total playing time 1 hour) The Aims of Education (1 mp3 file, total playing time 1 hour) The B-language Workshop (5 mp3 files, total playing time 5 hours, 35 minutes) Weekend with Maslow (9 mp3 files, total playing time 4 hours, 25 minutes) Volume Two: The Eupsychian Ethic (6 mp3 files, total playing time 5 hours, 45 minutes) The Farther Reaches of Human Nature (10 mp3 files, total playing time 9 hours, 45 minutes) Samples and the entire recordings are available at www.abrahammaslow.com/audio.html The mp3 materials above are published by Maurice Bassett on behalf of the estate of Abraham Maslow.

maslow's modern relevance

When you read Maslow's work, and particularly when you hear him speak about it, the relevance of his thinking to our modern world of work and management is astounding.

The term 'Maslow's Hammer' is a simple quick example. Also called 'The Law of the Instrument', the expression refers metaphorically to a person having just one 'tool' (approach or method available or known/learnt) and so then treating every situation the same. Other writers have made similar observations, but 'Maslow's Hammer' is the most widely referenced comment on the subject. Maslow's quote is from his 1966 book The Psychology of Science - A Reconnaissance: "I suppose it is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail.." ('Maslow's Hammer' - Abraham Maslow, 1966) Maslow's explanations and interpretations of the human condition remain fundamentally helpful in understanding and addressing all sorts of social and behavioural questions - forty or fifty years after his death. You will particularly see great significance of his ideas in relation to modern challenges for work such as in the Psychological Contract and leadership ethics, and even extending to globalization and society. Maslow is obviously most famous for his Hierarchy of Needs theory, rightly so, because it is a wonderfully simple and elegant model for understanding so many aspects of human motivation, especially in the workplace. The simplicity of the model however tends to limit appreciation of Maslow's vision and humanity, which still today are remarkably penetrating and sensitive.

david c mcclelland's motivational needs theory

American David Clarence McClelland (1917-98) achieved his doctorate in psychology at Yale in 1941 and became professor at Wesleyan University. He then taught and lectured, including a spell at Harvard from 1956, where with colleagues for twenty years he studied particularly motivation and the achievement need. He began his McBer consultancy in 1963, helping industry assess and train staff, and later taught at Boston University, from 1987 until his death. McClelland is chiefly known for his work on achievement motivation, but his research interests extended to personality and consciousness. David McClelland pioneered workplace motivational thinking, developing achievement-based motivational theory and models, and promoted improvements in employee assessment methods, advocating competency-based assessments and tests, arguing them to be better than traditional IQ and personality-based tests. His ideas have since been widely adopted in many organisations, and relate closely to the theory of Frederick Herzberg. David McClelland is most noted for describing three types of motivational need, which he identified in his 1961 book, The Achieving Society:

achievement motivation (n-ach) authority/power motivation (n-pow) affiliation motivation (n-affil)

david mcclelland's needs-based motivational model

These needs are found to varying degrees in all workers and managers, and this mix of motivational needs characterises a person's or manager's style and behaviour, both in terms of being motivated, and in the management and motivation others.

the need for achievement (n-ach)

The n-ach person is 'achievement motivated' and therefore seeks achievement, attainment of realistic but challenging goals, and advancement in the job. There is a strong need for feedback as to achievement and progress, and a need for a sense of accomplishment.

the need for authority and power (n-pow)

The n-pow person is 'authority motivated'. This driver produces a need to be influential, effective and to make an impact. There is a strong need to lead and for their ideas to prevail. There is also motivation and need towards increasing personal status and prestige.

the need for affiliation (n-affil)

The n-affil person is 'affiliation motivated', and has a need for friendly relationships and is motivated towards interaction with other people. The affiliation driver produces motivation and need to be liked and held in popular regard. These people are team players.

McClelland said that most people possess and exhibit a combination of these characteristics. Some people exhibit a strong bias to a particular motivational need, and this motivational or needs 'mix' consequently affects their behaviour and working/managing style. Mcclelland suggested that a strong n-affil 'affiliation-motivation' undermines a manager's objectivity, because of their need to be liked, and that this affects a manager's decision-making capability. A strong n-pow 'authority-motivation' will produce a determined work ethic and commitment to the organisation, and while n-pow people are attracted to the leadership role, they may not possess the required flexibility and people-centred skills. McClelland argues that n-ach people with strong 'achievement motivation' make the best leaders, although there can be a tendency to demand too much of their staff in the belief that they are all similarly and highly achievementfocused and results driven, which of course most people are not. McClelland's particular fascination was for achievement motivation, and this laboratory experiment illustrates one aspect of his theory about the affect of achievement on people's motivation. McClelland asserted via this experiment that while most people do not possess a strong achievement-based motivation, those who do, display a consistent behaviour in setting goals: Volunteers were asked to throw rings over pegs rather like the fairground game; no distance was stipulated, and most people seemed to throw from arbitrary, random distances, sometimes close, sometimes farther away. However a small group of volunteers, whom McClelland suggested were strongly achievement-motivated, took some care to measure and test distances to produce an ideal challenge - not too easy, and not impossible. Interestingly a parallel exists in biology, known as the 'overload principle', which is commonly applied to fitness and exercising, ie., in order to develop fitness and/or strength the exercise must be sufficiently demanding to increase existing levels, but not so demanding as to cause damage or strain. McClelland identified the same need for a 'balanced challenge' in the approach of achievement-motivated people. McClelland contrasted achievement-motivated people with gamblers, and dispelled a common pre-conception that n-ach 'achievement-motivated' people are big risk takers. On the contrary typically, achievement-motivated individuals set goals which they can influence with their effort and ability, and as such the goal is considered to be achievable. This determined results-driven

approach is almost invariably present in the character make-up of all successful business people and entrepreneurs. McClelland suggested other characteristics and attitudes of achievement-motivated people:

achievement is more important than material or financial reward. achieving the aim or task gives greater personal satisfaction than receiving praise or recognition. financial reward is regarded as a measurement of success, not an end in itself. security is not prime motivator, nor is status. feedback is essential, because it enables measurement of success, not for reasons of praise or recognition (the implication here is that feedback must be reliable, quantifiable and factual). achievement-motivated people constantly seek improvements and ways of doing things better. achievement-motivated people will logically favour jobs and responsibilities that naturally satisfy their needs, ie offer flexibility and opportunity to set and achieve goals, eg., sales and business management, and entrepreneurial roles.

McClelland firmly believed that achievement-motivated people are generally the ones who make things happen and get results, and that this extends to getting results through the organisation of other people and resources, although as stated earlier, they often demand too much of their staff because they prioritise achieving the goal above the many varied interests and needs of their people. Interesting comparisons and relationships can be drawn between McClelland's motivation types, and the characteristics defined in other behavioural models, eg: John Adair's Action-Centred Leadership model: Achievement-motivated managers are firmly focused on the Task, often to the detriment of the Individual and the Team. Affiliationmotivation people are Team and Individual centred. (Note that John Adair's Action-Centred leadership model is John Adair.) Katherine Benziger'sThinking Styles model: Achievement-motivation is a double-frontal brain mode style; affiliation-motivation is right basal (rear); authority-motivation is arguably left basal (rear). DISC (Inscape, Thomas International, etc) system: Achievement-motivated people are 'D' profiles - results-driven, decisive, dominant, etc. Affiliation-motivated people are I (proactive) and S (reactive) profiles. Authority-motivated people are S and C profiles. Hersey/Blanchard's Situational Leadership model: Achievement-motivated people tend to favour the styles of the first and second modes ('telling' and 'selling'); affiliation-motivated people tend to favour the third mode ('participating'); and the authority-motivated people tend to favour the style of mode four ('delegating'). Please note that Situational Leadership is protected intellectual property: Situational Leadership is a trademark of the Centre for Leadership Studies. Situational Leadership II is a trademark of The Ken Blanchard Companies. Use of material relating to Situational Leadership and/or Situational Leadership II requires licence and agreement from the respective companies.

McGregor XY Theory: Achievement-motivated people tend towards X-Theory style, due to their high task focus; there are plenty of exceptions however, and training definitely helps the n-ach manager to see the value of employing Theory Y style. n-pow managers are definitely Theory X. n-affil are typically Theory Y and if not can relatively easily be trained to be so. Herzberg motivators and hygiene factors: n-ach people are more responsive to the Herzberg motivators (especially achievement obviously) than n-affil and n-pow people.


Snezana Miljkovic
All health care organizations deal with proposed actions for achievement of the goals with the best use of human resources. In that respect, close attention must be paid to motivation of individuals by means of initiative, rewards, leadership within which the work is being organized. The goal is to develop motivational processes and working environment that would help individuals to show their results in accordance with expectations. Motivation is the process of initiating human activities which is directed to attainment of certain goals. Employees who have unclear objectives tend to work slowly, they have bad results, lack interest and perform less tasks than the employees who have clear and challenging goals. Employees with clearly defined goals are more energetic and productive. Modification of behavior involves the use of four means for behavior change known as intervention strategies. These strategies are: positive incentive, negative incentive, punishment and lack of respond. Acta Medica Medianae 2007;46(2):53-62.
Correspondence to: Snezana Miljkovic Clinical center Nis 48dr Zoran Djindjic Blvd. Phone: 063/ 472 000 E-mail: miljkovi@kcnis.co.yu

Introduction How to motivate people? This question is the key problem and the answer-the highest principle of health care management. All health care organizations deal with proposed actions for achievement of the goals with the best use of human resources. In that respect, close attention must be paid to motivation of individuals by means of initiative, rewards, leadership within which the work is being organized. The goal is to develop motivational processes and working environment that would help individuals to show their results in accordance with expectations. Theory of motivation studies the motivation process. It explains why people at work behave in the manner as they do and the direction they take. It also describes what health care organizations may do in order to encourage people to put efforts and abilities in order to achieve organizational goals and satisfaction of their needs. Motivation The process of motivation is more complex than most people think. People have different needs, set different goals in order to satisfy needs and undertake various actions for attainment of the goals. It would be wrong to assume that there is one approach of motivation which could be used in any situation. The biggest problem of health care management is joining what is needed with the behaviour which is awarded. Although it is a big problem, it mainly remains unsolved. Work reward may be material or moral. Accordingly, motivation may be divided into material and moral. However, it is clear that soon or later, moral motives get transformed into the material ones in the consciousness of employees and thus, material motivators have uncomparably greater power for motivation. Moral motives

may be also called collective motives-especially for team work in health care organizations whereas material motives are called personal (11). Such classification is rooted in the fact that medals, recognitions and similar awards are given to employees based on their merits for the benefit of entire institution. It is very spesific that moral motivators were recognized in first years of socialist government in many countries including this one as well. On the other hand, material motivation is exactly what was present in the mind of workers but was not considered as the moral one, since it was not in compliance with the current ideology of that time. After several decades, when workers started talking about their earnings and personal incomes without any barrier, personal motives became the primary ones. In developed Western countries and especially in Asia (Japan, Korea), collective and personal motives are successfully interrelated. Motivation is the process of initiation of an activity aimed at achieving specific goals. Work motivation includes different methods and processes of challanging, maintaining and stimulating such behaviour directed to attainment of specific work goals. Motivation includes powers which affect persons or their inner side and they cause the person to behave in the certain,
Motivation of employees and behaviour modification in health care organizations Sneana Miljkovi

54 targeted manner (12). Since specific work motivation of employees influence their productivity, one of the tasks of the management is to control motivation of employees aimed at attaining the organizational goals. People (employees) want different things. Manager must be able to identify and understand these differences and help employees satisfy their wishes and needs through organization. It is surprising that many managers are not sure what rewards are worthy for their employees. Experts need not agree upon everything that motivates employees and upon effects of working conditions in the course of their careers, but they agree that organization must: Attract people and encourage them to remain; Let people perform their tasks they are employed for and Stimulate people to overcome routine performances (routine performance of tasks) and to become creative and innovative in their work. Accordingly, in order to become effective, one health care organization must motivate employees in the right manner, i.e. take into account their wishes and needs in order to make them productive members of the organization and thus attain final goal of the institution through efficient and qualitative service provision to its beneficiaries.

Work motivation strategy Health care managers use different strategies to motivate employees to work. Each strategy is aimed at satisfying the needs of organization members through appropriate organizational behaviour (8). However, it is very difficult to say which of the strategies is the most efficient since each of them shows certain effects in different organizational situations. Practice has shown that combination of known strategies is the best in the process of work motivation where dominant role belongs to the strategy that best fits to the current organizational situation. The first (basic) motivation strategy is communication. Good communication among managers (hereinafter referred to as: Director) and his/her subordinated structures provides satisfaction of elementary human needs. Managers must be implementors of good communication. Their affinity towards subordinated ones, readiness to learn their problems and solve them shall make employees feel more secure, have the feeling of affiliation to the health care institution and thus the feeling of self-esteem through the work in health care institution. Security, affiliation and self-recognition are basic human needs valid for members of the organization too, and communication is one of key instruments for attainment of these needs. The second strategy of work motivation is manager's attitude towards employees. This strategy is based on McGregor's theories X and Y, i.e.-on negative (X Theory) and positive (Y Theory) assumptions of managers related to subordinated members of the organization (4). If the content of negative attitude includes assumptions about the mediocrity of the subordinated, their lack of interest for the quality and contribution to the health care organization, why they are often threatened, it does not yet mean that such attitude will have non-motivational effects. However, manager's positive attitude of employees being valued, eager to sacrifise and identify with the health care organization-will,for sure, have motivational impact on employees. The third category of motivation of employees is work conceiving and enrich-ment. This strategy may be applied to middle level medical personnel (nurses-medical techni-tians) and is aimed to reduce usual routine of the workplace as well as attainment of higher efficiency at work, that is, during work performance. One of the oldest manner for elimination usual routine of workplace through work conceiving is job shift. The employee does not remain for a long period of time at the same job ( especially: intensive care ward, dialysis, coronary ward, etc) but is shifted from one task to another by the manager-during a certain time cycle. Of course,

job shift requires multiple qualifications of an employee ( in case of complete shift from one job to another) but if the job content on positions the employee is shifted throughout is similar or the same, it is not necessary that he/she is multi qualified. Then it is about a partial shift. Work enrichment includes introduction of motivators into the work process and at the same time, health care institutions has the opportunity to have multi-qualified middle level personnel for the certain type of pathology. This type of shift is rarely related to the profile of a person in charge of instruments and anesthaetist due to the specific knowledge and specific traits of the person for the same occupation. The fourth strategy of work motivation is based on the concept of so-called behaviour modification. This concept is based on stimulating certain behaviour depending on the consequences that such behaviour produces. That is why an individual tends to repeat that behaviour which gets rewarded and to eliminate the one that is being punished. If managers want to modify behaviour of their subordinates, they must know in advance what consequences such modification will produce. So-called positive reinforcement of behaviour is a desired consequence of behaviour change (2). For example, if an employee arrives on time every morning, appraisal of such behaviour will reinforce such behaviour. If an employee is late at work all the time and gets criticised by the superior or gets reduced salary, that will encourage his behaviour in opposite direction from the present one-that is, the employee will try to get on time at work. In such case, there will be so-called negative behaviour reinforcement, i.e. stimulation of the behaviour contrary to the previous one. Punishment is manifestation of consequences of undesired behaviour. In spite of the fact that punishment may cause behaviour change in terms of rapid transfer from the undesired into the desired
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55 behavior, it may also have a set of undesired side effecst. For example, salary reduction based on being unpunctual may cause increased absence from work that may be long-term consequence with higher damage to health care institution than having an employee who is unpunctual. In order to have actual positive impacts on work motivation by behaviour change strategy, management must inform employees in a clear manner about behaviour at work and its consequences. On the other hand, every programme of behaviour change tending to be effective must involve the following elements: 1. identify different levels of rewarding for different employee performance quality,

2. warn clearly the employee when his/her behaviour deviates from the common one, 3. punish the employee in a discrete manner, not before his/her colleagues he/she is working with, 4. always reward good work and behaviour and punish negative behaviour and reluctance for work in order to have medical employees convinced in the serious determination of management in its efforts to attain positive changes of work behaviour. Motivation measurement One of the basic problems in study and work motivation strategy change is: how to measure motivation? It is possible by the application of method with three basic motivational techniques: Conducting surveys of medical personnel, that is, opinion polls on what motivates them to work. Assessment of behaviour of employees in changed (different) work situations. Conducting surveys of employees as the tehnique of work motivation is the easiest to apply (3). It is enough to make a questionnaire that will, besides usual, standard data, such as sex, age working experience of a respondent and similar,have a seven level scale where number 1 will designate assessment " completely nonmotivated", numbers 2,3,4 and 5 "partially motivated" and number 7 " very motivated". Respondents will circle the number offered in the scale according to their own feeling of motivation degree. Employees' behaviour assessment, as a technique for motivation measurement , is more delicate that the above mentioned technique. Namely, the same employees will perform the same tasks in other hospitals, under different conditions, in a completely different way. The example for this is one of the most advanced hospital, orthopedic-neurosurgery hospital known worldwide as "Alpha Clinic" from Munich and it is recognized for the least invasive methods of Prof. Dr Jurgen Toft. Besides these internationally recognized methods, it is also known for famous luxury equipment including modern equipment and seasonal uniforms for employees. It was very easy to observe and evaluate behaviour of employees under changed working situations. Namely, employees who were working on the same jobs in the city hospital in Munich had much better performance once they were transferred from this city hospital into this modern and luxury hospital. Although almost the identical technology was applied, many factors made them work better, more efficiently, more productively and with better quality and politness and understanding for their patients. First of all, the

fact that they work in a "famous clinic" "Alpha Clinic" whose patients are often celebrities from show business gave the employee the feeling of a special status, not only in the hospital but in the society, family, friends. Then, work control was intensified. Finally, opportunity to earn better salaries was far higher than in all other hospitals in Munich. Behaviour assessment of employees within this technique may be done by bringing conclusions based on one simple observance of actions of employees under changed working conditions. However, more precise results may be obtained by gathering data through interviews, surveys and from personal employee cards. This data are then statistically processed, by means of methods such as: multivariant analysis and multiple linear regression analysis where a dependable variable would be work motivation and independable variables would be divided into structural, personal and environment ones. Finally, identification of relation between independable variables and work motivation under changed working conditions shall provide measured level of work motivation of employees. Performance measurement is the most exact technique for work motivation measurement, but not the most reliable. Work standards fall in a very sensitive area of health management actions and therefore there are sometimes errors that are impermissable when medecine and health care is concerned. Treatment complications, so-called error in treatment, feasible errors in examinations ( such as insufficient diagnosis measures, wrong diagnosis in examination, missed diagnoses, wrong indications, complications of medical interventions, inadequate nurse service) cause dangers from error that may be double: firstly, if standards are set too low and secondly, if they are set too high. In both cases, loss in quality and work efficiency are present. In the first case, employees shall achieve the set standard easily ( bigger number of nurses for a smaller number of patients), maybe even after 3-4 hours of work meaning that full performance will be achieved with half of their real abilities. This is undobtedly harmful to health care institution since available human resources are not used in full. In the second case, employees will not be able to achieve 100% of the planned activities that will anyhow harm reputation of health care organization, such as impolite personnel, inade-quate service provision, etc. If other positions in the same work process are properly standar-dized-it will be so-called bottle neck of that process. Accordingly, it is very important to identify the required effort the employee can really put in the course of eight hour working day. Different jobs require different efforts and what effort an individual is going to

Motivation of employees and behaviour modification in health care organizations Sneana Miljkovi

56 put depends on the level of his/her motivation. So, measuring effort (the highest possible performence for specific task and its deviation) may measure the level of work motivation of an individual. Motivation process What is motivation? Motif is the reason to do something. Motivation deals with factors that influence people to behave in a certain manner. Three motivation components are as follows: Direction of an action what a person is trying to do, effort how much effort a person is putting and persistence (duration) how long a person is putting effort. Motivation of employees deals with how to make people take the desired direction in order to achieve desired results. Self-motivation refers to setting of desired goal and undertaking actions to achieve the goal (9). Motivation may be described as targeted behavior. People are motivated when they expect actions which will lead to goal achievement and acquire worth rewards, those rewards which satisfy their needs. Well-motivated people are those people who have clearly defined goals, who undertake the actions for which they believe will achieve those goals. Such people may be selfmotivated and as long as it provides attainment of organizations goals, it is considered to be the best motivation form. Majority of us should more or less be motivated. Organization as a unit may provide context within which high levels of motivations may be achieved through the provision of initiatives and rewards, job satisfaction and opportunities to learn and develop. Managers should have major roles in motivating employees in order to make them give their maximum, by using motivational means provided by the organization(1). In order to do so, it is necessary that they understand the motivation process, how it functions and what are the various present types of motivation. Motivation of employees and behaviour modification in health care organizations
Figure 1. Motivation process (Amstrong, 2001)

The Figure 1 shows the model of needs. It suggests that motivation is initiated by conscious and unconscious recognition of unsatisfied needs. These needs create a wish. Then the setting of goals follows, which is believed to satisfy these needs and wishes and selection of behavior directions which are expected to achieve the goals. If the goal is achieved, the need will be satisfied and behavior will probably be repeated

next time when similar need occurs. In case the goal is not achieved, it is less probable to have the same action repeated. This process which repeats successful behavior or actions is called intensification or law of effect. The key motivation principle states that performances are based on the level of abilities and motivation of the person. This principle is often shown by the following formula (1) Amstrong, 2001): Performances = f (capabilities x motivation) According to such principle, none of the tasks may be successfully completed if the person in charge of that task is not capable to do it. Capability is the talent of the person to perform tasks related to the goal. That talent includes intelectual and physical competences. However, regardless how inteligent or skillfull the person is, capability itself is not enough. The person must also wishes to achieve the high level of performance. Discussions related to motivation in general refer to the following: What directs behavior? What is the behavior direction? How to maintain such behavior? Basic phases of motivation process in the organization More precisely, the motivation process begins with identification of a person's needs. The needs are shortcomings faced by a person at certain time. These shortcomings may be psychological (such as the need for recognition), physiological (such as the need for water, air or food) or social (such as the need for socilizing). When there is deficit of needs, an individual will probably increase his/her efforts (phase 2). Need deficit creates inner tension of an individual who reveals that tensions are unpleasant and wishes to reduce or eliminate them. Motivation is targeted (phase 3). Objective is a specific result which an individual wishes to achieve. Objective achievement may significantly reduce the needs. Employees- objectives may be considered as leading drivers. For example, some employees have powerful need for career development. Their expectaions are that overtime spent on project will lead to promotion. Such needs and expectations often create unpleasant inner tension with an individual. Belief that certain, specific behavior may overcome these feelings will make an employee do his/her best to reduce that tension by behaving in such a manner (phase 4).
Goal setting Need Goal achievement Action

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57 1. Employee identifies needs

Figure 2. Essence of motivation process (Hallriegel, Slocum, Woodman, 1998)

Promotions and development are two ways by which a health care organization intends to maintain desired behaviors. They are signals (feedback) to emplyees that their needs for career development and recognition and their behavior are adjusted (phase 5). When employees receive rewards or punishments, they will again estimate their needs. Cycle may be shown in the following manner.
Figure 3. Model of motivation cycle

Motivational challanges General model of the described motivation process is simple. In the real world, the motivation process is not that clear, of course. The first challange is that motives may be only assumed, they cannot be seen. The second challange is concentrated on the dynamic nature of needs (7). Everyone has many needs, wishes and expectations at any time. These fectors get changed along time and may be in conflict with one another. Employees who work overtime in order to satisfy their needs for recognition may discover that these extra working hours are directly in conflict with the affiliation need and their wish to be with their families. The third challange involves differences in motivation of people and in energy with which people respond perceiving medical services as a dynamic process and medical staff as professionals, in accordance with that process. Types of motivation Motivation at work may be considered in two ways. Firstly, people may be self-motivated by searching, finding and getting jobs which will satisfy their needs or at least lead them where their objectives are expected to be achieved. Secondly, people may be motivated by management through such methods as salaries, rewards, etc. Herzberg defined two types of motivation: Inner motivation independently generated factors influencing people to behave in a special manner or to move in a special direction. These factors involve responsibility (the feeling that job is important and presence of control over own resources), autonomy, freedom, independence in activities), level of the use and development of skills and abilities, interesting and challanging job and the opportunity for advancement. External motivation what has been done in order to motivate people. It involves rewards such as salary increase, appraisal and promotion

and punishments such as disciplinary measures, salary reduction and criticism. External motivators may have one instant and powerful effect, but they will not necessarily last long. Inner motivators which deal with the "working life quality", will probably have deeper and long-lasting effects because they are present with individuals, i.e. they are not externally imposed. Achievement model (David McClelland) David McClelland considered that everyone had 3 especially important needs(12): 1.need for achievement, 2.need for affiliation and 3.need for power. Individuals with powerful motif will be able to undertake actions that will influence behaviour of others and possess powerful emotional appeal. These individuals are engaged in provision of status rewards for their followers. Some individuals with powerful motif of affiliation tend to establish, maintain close personal relations with others. Individuals with powerful motif for achievement are evaluated according to some excellence standards or unique contribution based on which they evaluate their behaviour and achievements. Motivation by achievement, especially in regard to human resources management speaks about the achievement motivation model, i.e. that people are motivated in accordance with the power of their wish to perform tasks in regard to medical standard of excellence or to succeed in competitive situations. According to McClelland, almost all people believe to possess the "motif for achievement". To what extend people are motivated by achievements depends on their childhood, personal or professional experience and type of organization they work for. MOTIVATIONAL FACTORS The first group of factors, motivational factors, incorporate job, recognition, career development and responsibility. These factors are linked with positive feeling of an individual related to the very context of the job. These positive feelings are linked with achievements, recognition and responsibility. In other words, motivators are inner factors which are directly linked to the job and are to a great extent inert
6. Employee again assess reduction of needs 2. Employee seeks manners to satisfy these needs 3. Employee selects targeted directed behavior 1. Employee identifies

needs 5. Employee receives rewards or punishments 4. Employee behaves in such manner Motivation Performance Dissatisfaction

Motivation of employees and behaviour modification in health care organizations Sneana Miljkovi

58 for the person. Organization's policy may have only indirect impact on them. However, if performances of excellence have been defined by an organization, individuals will be enabled to feel that they have completed their tasks exceptionally well. HYGIENE FACTORS The second group of factors, hygiene factors incorporate policy of health care organization, administration, technical supervision, salary, benefits, working conditions and interpersonal relationships. These factors are linked to negative feelings of an individual related to the job and to the environment the job is performed in. Hygiene factors are contingency factors or external factors for the job. Culture impact on hygiene and motivational factors. Managers must be aware of cultural differences and how these differences may influence motivation of employees (6). Herzberg believed that regardless of cultural differences, motivational and hygiene factors influence medical workers in a similar manner throughout the world. For employees in helath industry in the USA, 80% of factors that lead to job satisfaction are motivators. For employees in other countries, motivators account for 60-90% of the reasons for job satisfaction. Hygiene factors account for majority of reasons because of which employees are dissatisfied with their job. In Finland, 80% of employees indicate that hygiene factors mostly contribute to job dissatisfaction, whereas only 10% of employees said that hygiene factors contribute to job satisfaction. Motivational-hygiene model also indicates that job satisfaction and dissatisfaction do not form unique continuum (dimension), but are on separate and different dimensions as shown in Figure below. So, according to this model, a person may be satisfied or dissatisfied at the same time.
Figure 4. Motivationalhygiene situation (Hellrieger, Slocum, Woodmon, 19

Criticism of the model. Besides its positive features, this model was seriously criticised. Such a criticism was that Herzberg used methodologically limited procedure: i.e.the method he used for measurement influenced the results. He asked two key questions, Can you describe in detail when you feel especially well at your work?" and Can you describe when you feel especially badly at work?". Answering such questions, people show

tendency to give socially acceptable replies, i.e. answers they think the researcher wants to hear or sound reasonable". Such people have tendency to add good business results to their own efforts and reasons for bad results attribute to others. The second serious question is whether satisfaction and dissatisfaction are two separate dimensions (as shown in Figure). Research data are often mixed. Some researchers found out factors which may contribute both to satisfaction and dissatisfaction while others revealed that motivating factors may contribute to dissatisfaction and hygiene factors to satisfaction. Some evidence, not that strong, link experiences such as increase of working responsibility, challanges and opportunity for advancement with high performances. Unfortunatelly, researchers have paid little attention to designing a model which would explain why certain factors of the job influence performances in a positive or negative aspect. Goal setting model (Locke-Latham's model) As health care organizations tend to achieve specific objectives, individuals are motivated by certain objectives and their achievement, too. In fact, the process of goal setting is one of the most important motivational tools which affect employees in organizations. Ed Locke and Gary Latham developed a sophisticated model of individual goal setting and performances (8). The basic idea of this model is that the aim serves as a motivator since people compare their performances with the ones required to achieve a goal. Having knowledge of the goal can also improve performances since the goal makes the type and level of expected performances clear. Clear assignement of tasks, competences and responsibilities, clearly defined working conditions, opportunity for agreement and pointing out to development opportunities have influence on working environment. All this influences the relationship between a health care institution and employee; the quality of this relationship is experienced by patients. On one hand, employees have an open opportunity of acquiring performance linked with satisfaction and on the other hand, precisely formulated goals and expectations enable employees to really achieve required performances . Basic features (components) of this model are: Challange. Goal setting is the process of development, negotiation, and target setting which are challanging for an individual. Employees with unclear objectives or without objectives tend to work more slowely, perform tasks badly, show lack of interest and completely less work than employees who have clearly defined and challanging objectives. Employees with clearly

defined objectives are energetic and more productive. They complete tasks on time and take over next activities (and goals). Goals may be implicit or explicit, unclearly or clearly defined, independently or externally

Satisfaction No disatisfaction Ideal situation Bad situation No satisfaction Disatisfaction Motivator dimension continuum Hygiene factors dimension continuum Acta Medica Medianae 2007,Vol.46 Motivation of employees and behaviour modification in health care organizations

59 defined. Regardless of their form, goals serve to link time and efforts of an individual. Clear and challanging goals lead to higher performance than unclear or general goals. Goals which are hard, but not impossible will lead to higher performances more than easy goals. However, unreal and high goals may not be accepted or may lead to high performances only in a short period of time. Goal commitment, refers to commitment of an individual to achieve the goal depending on whether that goal is set by that person or someone else. Commitment to goal will probably be higher if a person is publicly commited to its achievement, if possesses strong need for such an achievement and if believes that may control those activities that will help in that goal attainment (12). Participation effect in committment to goal attainment is very complex. Positive committment to goal achievement is more probable if an employee participates in goal setting. Lack of wish to be involved in goal setting reduces committment to goal. However, even when managers need to define goals without participation of employees, they focus on efforts and better performances than when there are no set goals. Expected rewards for goals attainment play imortant role in the level of goal committment. The higher level of employee's belief in positive rewards (deserved salary increase, bonuses, promotion, etc.) conditioned by goal achievement, the higher their commitment to attainment of those goals will be. This is very similar to ideas contained in motivation theory of expectation. Similarly, if employees expect to be punished due to unrealized service performance, the probability for goal committment is also higher. However, the use of punishments and fear from punishment as primary tools for behavior menagement may create numerous problems. Employees compare expected rewards with rewards they have really received. If the expected and received rewards are in harmony, the rewarding system will probably continue to support committment to goal. If employees have opinion that the received rewards are smaller

than they had expected them to be, they may see the difference. If there is noticed or real difference, employees will reduce their committment to goal. Team work (characteristic for health care institutions) and equalled pressure are other factors that influence individuals to commit to goals. Feedback makes goal setting and individual's responding to goal achievement (performance) a dynamic process. It provides information about output ( output results) and the level of goal achievement to employees and others. The feedback enables individuals to compare expected reawards with the ones already received. This comparison, in a feedback, may influence changes in the level of goal committment. Task complexity is the last force moderator between goals and performances that are being considered. With simple tasks (for example, answering telephone call), effort encouraged by challanging goals leads directly to task completion. With more complex tasks (for example, urgent admission), effort does not lead directly to effective performances. Individuals must also decide where and how to allocate effort. Mediators. Assume that an individual has challanging goals and that moderator factors (mitigation factors) support attainment of these goals. How does four moderators, direction, effort, persistence and strategy influence performance? Direction intent focuses behaviour on activities expected to result in goal achievement and distract individuals from activities irrelevant for goals attainment. Effort put by an individual depends on goal importance. In general, the higher the challange, the higher effort needs to be put, provided that an individual is trying to achieve the goal and to commt to its achievement. Persistence incorporates individual's readiness to face and endure in his/her efforts including situations under stress, all for the benefit of the patient. Stratgey for task attainment is the plan that an individual has to develop through experience and instructions how to accept the task. Performances. They will probably be very high when: 1)challanging goals are present, 2)moderators are present (ability, goal commitment, feedback and task complexity) and 3)when mediators function (direction, effort, persistence, task strategy). Three basic types of quantitative output measurements may be used for performance evaluation. These are, provided quality (noticed errors), money (profit, costs, revenues, i.e. invoiced services), and time (timely standardized services examination, bandaging, etc.).

When such measurements are not available or are inappropriate, qualitative goals and indicators can be used (5). Many health care organizations have developed code of ethics in order to help employees bring better ethical decisions. Designing ethical guidelines has several advantages. Some of the advantages of setting ethical goals are: assistence to employees to identify what their health care organizations find as acceptable business practices, disscussion of ethics as a part of decisionmaking, avoidance of disscussion between employees about what is right and what is wrong and avoidance of ambivalence in decision-making caused by the rewarding system established by an organization which ,as proved, rewards nonethical behaviour. Rewards. When employees achieve high level of performances, rewards may become important stimulus to continue with high performance. Rewards may be: external (stimulus, promotions, etc.) or internal (feeling of acomplishment, pride due to excellence achievement). Satisfaction. Many factors, including challanging job, interesting associates, salary, opportunity to learn and good working conditions, influence
Motivation of employees and behaviour modification in health care organizations Sneana Miljkovi

60 job satisfaction of an individual. However, this model is primarily focused on the level of satisfaction the employee has by goal achievement. Consequences. Individuals who are satisfied with organization and devoted to organization will probably remain in it and accept present challanges contrary to individuals who are less satisfied and devoted. Satisfied individuals are very little absent from work. This link bring us back to the beginning of the goal setting model cycle. What happens if things go wrong and an individual becomes dissatisfied? Answers of individuals may be: 1)absence from work (leaving organization), 2)avoidance to work (absence, late for work and leave work early), 3)pscychological defense (alcohol, drug abuse), 4)constructive disorders (complaints), 5)defense (refusal to do what is asked) and 6)aggression (theft or threath). Naturally, resigning is the most general term for great dissatisfaction. This model provides an excellent framework to a manager or the team in identifying potential problems related to low or average performances of employees. Several questions may be asked for problem identification: 1)how are goals set,

2)are goals challanging, 3)what affects goal committment and 4)do individuals know when they have performed their tasks well. Secondly, it provides specific advise to managers related to how to make high performance demanding working environment. Thirdly, it shows teh system of key factors interaction, such as goal importance, goal committment, feedback and rewards for achieving high performances. Incentive theory (reinforcement) Concept of stimulus is based on the law of effects which claim that people show tendency to repeat behaviours which enable them obtaining of positive rewards and avoidance of actions related to negative consequences. Rewards (stimulus) an individual receives may be internal or external (11). Many situations when trainings are concerned provide internal and external rewards. For effectively completed job for which the appraisal is given, it may be considered as external reward (compliment) and internal reward (feeling of pride). The person that has received positive stimulus for learning will continue to learn. The past is what preceeds and it is the stimulus for behaviour. Consequence is the result of behaviour and it may be positive or negative, in terms of goal or task achievement. Reinforcement (stimulus) increases frequency of specific behavior of employees. No matter if there is positive or negative stimulus, it always increases frequency of behavior of employees. Punishment or exclusion always reduces frequency of employees' behavior. Modern approach to training provision is based on the incentive concept (reinforcement). This popular approach linked to behavior modification uses the theory of a psychologist B. F. Skinner who claims that learning is not doing, it is changing what we do". Behavior modification implies the use of four tools for behavior change, designated as intervention strategies. These startegies are: positive stimulus, negative stimulus, punishment and lack of responding. Positive stimulus Positive stimulus is followed by pleasant consequences upon desired behavior has occured. Manager rewards desirable behavior of employees related to achievement of health care organization's goals. Primary and secondary stimuli. Primary stimulus is one event whose value is known by an individual. Food, shelter and water are primary stimuli. However, primary stimuli are not always stimuli. For example, food will not be stimulus for someone who has already had meal.

Majority of behaviors in the organization is under the influence of secondary stimuli. Secondary stimulus is an event that once had neutral value, but has received added value (positive or negative) for an individual due to his/her past experience. Money is one obvious example of secondary stimulus. Several factors affect effectiveness of positive stimulus and they may be considered as principles since they help in explaining optimum stimulating conditions. Principle of conditioned (accidental) stimulus claims that stimulus management may be used only when desired behavior is performed. It is inefficient to apply stimulus when desired behaviour is not performed. Urgent stimulus principle states that stimulus will be the most efficient if done immediately upon the occurence of desired behavior. Stimulus volume principle states that the higher stimulus upon the occurence of desired behavior the higher effect it will produce on the frequency of desired behavior. Value or amount of the stimulus is relative. Stimulus may be important for one person and insignificant for another. Principle of stimulus deprivation states that the more people are deprived of that stimulus, the greater effect it will have on future occurence of desired behaviour. However, if an individual is oversaturated with certain stimulus, the stimulus will have less effect. Stimulus and rewarding. These two terms often make confusion when used everyday. Rewarding is the event that is desirable or pleasant for the person. Therefore, it is subjective view of an individual whether rewarding will be considered as stimulus or not. In order to be viewed as stimulus, reward must increase the frequency of behavior it is given for. Reward is not considered as stimulus if the frequency of behavior gets reduced or reamined unchanged.
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61 Negatie stimulus Negative stimulus appears when an individual does something in order to avoid undesired consequences. The employee who arrives at work on time every day may do it in order to avoid critical feedback from his/her superior. Therefore, potential criticism causes that the employee undertakes the desired action. With negative stimulus, one unpleasant event resulting from employee's behavior is eliminated when desired behavior occurs (12). Negative stimulus is sometimes confused with punishment since both of them use unpleasant events in order to influence behavior. However, negative stimulus is used for the increase of desired

behavior frequency whereas punishment is used for reduction of non-desired behavior. Procedure of exclusion consists of three steps: identification of behavior needed to be reduced or eliminated, identification of stimulus which supports behavior and termination of stimulus. Exclusion is useful techniques for reduction and eventual elimination of behavior which violates normal work progress. It is absecnce of one expected respond to the situation. Excluded reaction can be viewed also as the failure to stimulate positive behavior. It is mostly the case when absence of respond to the situation is accidental. If managers fail to stimulate desired behavior, it means that they use exclusion of respond without noticing it. The result of it may be intentional reduction of desired behavior frequency. Absence of respond may reduce undesirable behavior of employees, but it does not replace automatically undesirable behavior with the desired one. Therefore, when exclusion is used, it should be combined with other methods of stimulation in order to develop desired behavior. Punishment Punishment is an unpleasant event which accompanies behavior and reduces its frequency. It is the action undertaken in order to distract person (recall) from undesirable behavior. While positive stimulus encourages more often occurence of desired behavior, punishment reduces the frequency of undesired behavior. In order to be considered as punishment, the event must reduce undesirable behavior. Only because one event is considered as unpleasant, it does not mean that it is necessarily punishment. The event must, in fact, reduce or stop undesired behavior (10). Organizations use several types of unpleasant events in order to punish individuals. Material consequences in case when the person fails to behave in an adequate manner includes salary reduction, disciplinary measures, transfer to worse job, etc. The worst punishment is to fire an employee. Interpersonal punishments are widely used. They include verbal objections by managers due to undesirable behavior of an employee or non-verbal punishments such as frowning, grumbling or aggressive body language. Sometimes, certain tasks by themselves may be unpleasant. Fatigue which accompanies hard and strenuous work may be perceived as punishment as well as bad working conditions. However, in some areas and for some employees, bad working conditions (dirtiness, confined space, etc.) may be something inseparable from work. Principles of positive stimulus have their equivalents in punishments. The punishment must

be directly linked to undisarable behavior (principle of conditioned punishment), the punishment should be immediately applied (principle of prompt punishment) and the greater punishment range, the more powerful the effect it will have on undesirable behavior (principle of punishment volume). As arguments against punishments, possible occurence of negative effects are used, especially in the course of longer period of time. Although a punishment may stop undesirable behavior of an employee, potential negative consequences may be higher than initial undesired behavior. Conclusion Health care system, getting more complicated and complex system requires different approach in its work since health care business is in its nature very intensive one. In addition to this, costs of operations within this activities show the tendency of progressive growth. Finally, satisfaction of a beneficiary correspons to a high extent to the quality of provided services,and therefore there is a need for good management and necessary motivational variables in order to ensure that employees in health care organizations would offer more efficient and effective service provision directed to beneficiaries of medical services. Models of motivation process are focused on psychological processes which motivate employees to certain behavior contrary to content model dealing with motivation content. It may be said that theories, approaches and concepts of behavior and motivation of employees were developed as a respond to managerial challange to find out the method for behavior management for people in health care organizations in order to achieve organization's goals. Management startegies were built on these challanges. Therefore, modernization of health care organizations management is a complex job since it does not only implies gradual improvement of "certain things" in management, but faster and careful introduction of new paradigm of health care management.
Motivation of employees and behaviour modification in health care organizations Sneana Miljkovi

62 References
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Dryden Press-a division of Harcourt College Publishers; 2000. 5. Coler Effective Behaviour in Organizations (seventh Edition). London: McGrow-Hill; 2002. 6. McShane Von Glinow. Organizational Behaviour, (second Edition) London: McGraw-Hill; 2002. 7. Armstrong M. A Handbook of Human resource Management Practice (8th Edition), London: Kogan Page; 2001. 8. Mari Lj, Miljkovi S. Menadment u zdravstvu, Ni: Kliniki centar, 2003. 9. Kondo J. Motivacija, kreativnost i kontrola kvaliteta: Japanska perspektiva, Evropski centar za mir i razvoj (ECPD); 1997. 10. Miljkovi S. Menadment i organizacija medicinskih ustanova. Zajear: Fakultet za menadment; 2006.

Eastern Michigan University

Digital Commons @ EMU

Senior Honors Theses Honors College 2005

Herzberg's Two-Factor Theory of Motivation Applied to the Motivational Techniques within Financial Institutions
Shannon Riley
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This Open Access Senior Honors Thesis is brought to you for free and open access by the Honors College at Digital Commons @ EMU. It has been accepted for inclusion in Senior Honors Theses by an authorized administrator of Digital Commons @ EMU. For more information, please contact libir@ emich.edu.

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Riley, Shannon, "Herzberg's Two-Factor Theory of Motivation Applied to the Motivational Techniques within Financial Institutions" (2005). Senior Honors Theses. Paper 119.

Herzberg's Two-Factor Theory of Motivation Applied to the Motivational Techniques within Financial Institutions

Throughout time, many have attempted to develop detailed theories and studies of motivation, satisfaction, and self-awareness. Each of those theories at some point has been applied and tested as to its effects on peoples lives, jobs, and personal goals in life and in the work place. Due to my strong interest in the management fields specifically, I have decided to look into the different styles of motivation that managers and leaders of organizations within the financial industry typically use. After all, it has been said that one of the managers most basic tasks is to communicate with and motivate their workers (Ruthanakoot, 2003). It would be very difficult to try to pinpoint one theory or even one technique that seems to work better or is more effective for a certain organization. The way individuals respond to different motivational styles and techniques will often clash or contradict one another. Instead, what is important to realize, and what I will

explore and analyze further, is why managers have chosen the styles they use within the workplace, whether it seems to be effective or not, and how different employees seem to respond. Through one-onone interviews with a variety of managerial levels and positions, I hope to make some judgement about the effectiveness of the motivational styles, the productivity, and the general job satisfaction of the employees under these specific managerial levels. To put it simply, I would like to see if these managers/leaders of the organizations may be applying some of the principles of Herzbergs Two-Factor Theory without actually knowing the theory.
Degree Type

Open Access Senior Honors Thesis



Job analysis, Job satisfaction, Employee motivation

This open access senior honors thesis is available at Digital Commons @ EMU: http://commons.emich.edu/honors/119

By Shannon Riley A Senior Thesis Submitted to the Eastern Michigan University Honors Program In Partial Fulfillment of the Requirements for Graduation with Honors in Business Management
Approved at Ypsilanti, Michigan, on this date ________ 1

Table of Contents
Introduction Summary.1 Motivational Theories & Research..2 The Study...10 Interview Analysis Wells Fargo Financial Dan Maurice, Branch Manager..15 Tim Thomas, District Manager..17 Cambridge Mortgage Corporation Laura Leavenworth, Loan Officer.....20 Tony Abate, General Manager...22

*ABC Bank Bonnie Andrews, Personal Banker24 Tracy Recendiz, Office Manger.26 Conclusion.28 Appendix A: Interview with Dan Maurice (Wells Fargo Financial)..30 Appendix B: Interview with Tim Thomas (Wells Fargo Financial)..33 Appendix C: Interview with Laura Leavenworth (Cambridge Mortgage).39 Appendix D: Interview with Tony Abate (Cambridge Mortgage).43 Appendix E: Interview with Bonnie Andrews (*ABC Bank)49 Appendix F: Interview with Tracy Recendez (*ABC Bank).53 Works Cited..60

*The name of the banking institution has been changed by request for the sake of confidentiality. Introduction Summary Throughout time, many have attempted to develop detailed theories and studies of motivation, satisfaction, and self-awareness. Each of those theories at some point has been applied and tested as to its effects on peoples lives, jobs, and personal goals in life and in the work place. Due to my strong interest in the management fields specifically, I have decided to look into the different styles of motivation that managers and leaders of organizations within the financial industry typically use. After all, it has been said that one of the managers most basic tasks is to communicate with and motivate their workers (Ruthanakoot, 2003). It would be very difficult to try to pinpoint one theory or even one technique that seems to work better or is more effective for a certain organization. The way individuals respond to different motivational styles and techniques will often clash or contradict one another. Instead, what is important to realize, and what I will explore and analyze further, is why managers have chosen the styles they use within the workplace, whether it seems to be effective or not, and how different employees seem to respond. Through one-on-one interviews with a variety of managerial levels and positions, I hope to make some judgement about the effectiveness of the motivational styles, the productivity, and the general job satisfaction of the employees under these specific managerial levels. To put it simply, I would like to see if these managers/leaders of the organizations may be applying some of the principles of Herzbergs Two -Factor Theory without actually knowing the theory.

Motivational Theories & Research Although there are many theories of motivation, there are only a few that I feel can be relevant and valuable in the work setting. Before settling on one theory to use in my analysis, I wanted to get a better understanding of some of the most familiar motivational theories. I have found that motivational theories have been categorized into two main groups: content theories and process theories. The content theories tend to focus on the needs of the individual, trying to explain the different factors that contribute to either encouraging or halting a behavior within that individual. These theories are also

appropriately known as need-based theories. Some of the more famous theories within this category include Maslows Hierarchy of Needs Theory (1954), McClellands Needs Theory (1961), and Herzbergs Two-Factor Theory (1959). The process theories seem to be much more complex and delve deeply into the thinking process of the individual, trying to explain the why or how of motivation. These theories explain why workers select behaviors and how they determine whether their choices were successful (Hunsaker, 2005). They also seem to have more interest in the personal factors within the individual and the psychology involved in their decisions and motivations. Some of the notable process theories include Vrooms Expectancy Theory (1964), and Adams Equity Theory (1965) (Ruthankoon, 2003). Although Im sure that each theory could be proven to show some relevance and validity within the work environment and throughout different industries, a description of all of the theories mentioned above is unnecessary for the purpose of this study. I will, however, take a glimpse into some of the content theories to show how they differ from Herzbergs Theory, the one that will be used further in this analysis.

Maslows Hierarchy of Needs Theory is one of the most well known motivational theories. Abraham Maslows theory identifies five levels of hierarchical needs that every individual attempts to accomplish or conquer throughout ones life. The needs start with the physiological (hunger, thirst, shelter) and then move upward in a pyramid shape through safety, social, and esteem needs, to the ultimate need for self-actualization. This final need for self-actualization is defined as ones desire and striving towards maximum personal potential. The pyramid shape to the theory is intended to show that some needs are more important that others and must be satisfied before the other needs can serve as motivators (Schermerhorn, 2003). According to Maslow, once a lower-level need has been largely satisfied, its impact on behavior diminishes (Hunsaker, 2005). One of the difficulties with using this theory to analyze organizations is that although it may appear very easy to implement, it is difficult to relate this distinct five-level hierarchy within an organization. Many times when this theory has been used, the results show that the needs that contribute to motivation more heavily vary according to the level of the individual, the size of the organization, and even the geographic location of the company. McClellands Need Theory explores the idea that there are three major needs that one will acquire over their lifetime as a result of the experiences in their careers or in their own personal lives (Schermerhorn, 2003). David I. McClelland believed that in order to understand human behavior and how an individual can be motivated, you must first understand their needs and inclinations. The Need for Achievement encompasses the desire to do better, to solve problems, and to master complex tasks. The Need for Affiliation is the desire for friendly and warm relations with others. These are often those

passive individuals that try to avoid conflict at all times, even when it might be necessary

to fulfill a task. Finally, the Need for Power is the desire to control others and influence their behavior. This is the need that I have often felt carried a fairly negative connotation, however it has been proven that successful, well-respected managers often lean towards those power need tendencies. Managers who possess the Need for Power tendencies in combination with the Need for Achievement can also be very effective managers. A manager with both characteristics would not only try to oversee the situation or environment, but also is continually looking for ways to improve the current situation and is not afraid to take on difficult projects or leadership roles. This theory may be very useful in an organization as a predictor of future managers or project leaders, however it limits the results to only three categories. In reality, all three of the needs established in this theory define an individuals personality, which need tends to show itself in certain situations could be used as the predictor. Managers should use this theory to identify the needs within themselves, their coworkers and subordinates to create work environments that are responsive to those need characteristics (Schermerhorn, 2003). Since I will be interviewing people already in management levels within an organization, I am not looking to see which need characteristics influence the individual personally or internally. I am instead looking to see how those managers choose to motivate and stimulate their own employees and whether those techniques are effective within the atmosphere of their particular organization. Herzbergs Two-Factor Theory divides motivation and job satisfaction into two groups of factors known as the motivation factors and hygiene factors. According to Frederick Herzberg, the motivating factors are the six job content factors that include achievement, recognition, work itself, responsibility, advancement, and possibility of

growth. Hygiene factors are the job context factors, which include company policy, supervision, relationship with supervision, work conditions, relationship with peers, salary, personal life, relationship with subordinates, status, and job security (Ruthankoon, 2003). Basically the theory differentiates the factors between intrinsic motivators and extrinsic motivators. The intrinsic motivators, known as the job content factors, define things that the people actually do in their work; their responsibility and achievements. These factors are the ones that can contribute a great deal to the level of job satisfaction an employee feels at work. The job context factors, on the other hand, are the extrinsic factors that someone as an employee does not have much control over; they relate more to the environment in which people work than to the nature of the work itself (Schermerhorn, 2003). Herzberg identifies these factors as the sources for job dissatisfaction. Hertzberg reasoned that because the factors causing satisfaction are different from those causing dissatisfaction, the two feelings cannot simply be treated as

opposites of one another. The opposite of satisfaction is not dissatisfaction, but rather, no satisfaction. Similarly, the opposite of dissatisfaction is no dissatisfaction. While at first glance this distinction between the two opposites may sound like a play on words, Herzberg argued that there are two distinct human needs portrayed (Herzbergs Motivation-Hygiene Theory, 2002). Therefore, the basic premise of the Two-Factor Theory is that if an employer or manager is trying to increase job satisfaction and ultimately job performance for an employee or coworker, they need to address those factors that effect ones job satisfaction. The most direct approach is to work on the intrinsic, job content factors. Giving the employee encouragement and recognition helps them to feel more valued

within the company, as well as giving a sense of achievement and responsibility. Herzberg says, that the only way to motivate the employee is to give him [her] challenging work in which he [she] can assume responsibility (Leach, 2000). I think that this statement can be applied to any job within any industry. If the employee does not feel some responsibility associated with a certain task or department, he/she will not feel like their work is worthwhile. Also people must believe that they are capable of attaining a goal before they will commit serious energy [or motivation] to it (Hunsaker, 2005). Therefore, it is important to include your employees in the decision making and at times the job assignment or delegation. This will help the employee to feel more responsibility and in turn a higher level of motivation. On the other hand, employers need to consider the level of job dissatisfaction among their employees as well. To directly approach the issue of dissatisfaction in the work place and to try and revitalize the environment a bit, employers need to focus on the hygiene or job context factors. For example if an employer brings in an ergonomic expert to alter the workstations in some way or change up some of the work teams, they might decide to turn the individuals desk to face a certain direction or change something as little as the height of the employees chair, or position or style of the keyboard and computer monitor. In the two-factor theory, job satisfaction and job dissatisfaction are totally separate dimensions. Therefore, when trying to improve a factor that effects job dissatisfaction, an extrinsic factor, such as the working conditions, this will not alter the employees perception of whether they are satisfied with their work; it will only prevent them from being dissatisfied (Schermerhorn, 2003).

Throughout my interviews and analysis, I would like to be able to address the different factors that the managers are able to work on directly and indirectly. Also, I am interested in learning simply whether or not the managers are aware of the differences the intrinsic or extrinsic rewards may have on the employee performance and ultimately satisfaction or dissatisfaction. The following is a brief explanation of the factors and how they might apply to the work environment. All of the factors, both motivation and hygiene, can have positive and negative attributes; however, both will have an affect on the employee satisfaction or

dissatisfaction none the less. The following is a glance at each of the motivation factors according to Herzberg. Achievement. An example of positive achievement might be if an employee completes a task or project before the deadline and receives high reviews on the result, the satisfaction the employee feels would increase. However, if that same individual is unable to finish the project in time, or feels rushed and is unable to do the job well, the satisfaction level may decrease. Recognition. When the employee receives the acknowledgement they deserve for a job well done, the satisfaction will increase. If the employees work is overlooked or criticized it will have the opposite effect. Work itself. This involves the employees perception of whether the work is too difficult or challenging, too easy, boring or interesting. Responsibility. This involves the degree of freedom an employee has to make their own decisions and implement their own ideas. The more liberty to take on that responsibility

the more inclined the employee may be to work harder on the project, and be more satisfied with the result. Advancement. This refers to the expected or unexpected possibility of promotion. An example of negative advancement would be if an employee did not receive an expected promotion or demotion. Possibility of Growth. This motivation factor includes the chance one might have for advancement within the company. This could also include the opportunity to learn a new skill or trade. When the possibility/opportunity for growth is lacking or if the employee has reached the peak or glass ceiling, as it is sometimes referred to, this could have a negative effect on the satisfaction the employee feels with their job and position. The following are the hygiene factors, which work in the same way with positive or negative attributes, however these factors can only have an effect on the dissatisfaction one feels. Company Policy or Administration. An employees perception of whether the policies in place are good or bad or fair or not, changes the level of dissatisfaction that employee will feel. Personal or Working Relationships. This is those relationships one engages in with their supervisors, peers, and subordinates. How someone feels about the interaction and discussions that take place within the work environment can also effect dissatisfaction. Working conditions. This includes the physical surroundings that one works within, such as the facilities or location. Salary. This factor is fairly simple, the increase or decrease of wage or salary effects the dissatisfaction within a company a great deal.

Personal Life. Although people try to separate the two, work and personal life, it is inevitable that one will affect the other. Feeling a Job Security. This is a pretty significant factor. The sense of job security within a position or organization as a whole relates to the dissatisfaction as well.

(Ruthankoon, 2003).

The Study Throughout my education at Eastern Michigan Universitys College of Business and through my past job experiences, I have found an interest in both business management, but more specifically the financial industry as a whole. I find it fascinating. Although I dont know what area of the financial industry I would like to follow, I k now where my interests lie and embrace this chance to learn as much about them as possible. The financial and banking industries are changing so rapidly in todays economy. I feel it would be interesting to interview managers and leaders within different companies in the industry to see where and how the styles and motivational techniques differ. I have chosen to interview managers/leaders at different levels from three different companies. Each of the three companies has a different pay structure and goals as an organization. The ultimate objective of this study is to see whether these leaders are applying some of the principles of the Herzbergs Two-Factor Theory without actually knowing or understanding the theory. The first managers I intend to interview are from the company Wells Fargo Financial. This is a company and culture that I am extremely familiar with, since I have been working with for them for the past nine months and plan to continue after graduation. Wells Fargo Financial offers a variety of consolidation, refinancing, small loans, credit card options, and more to their customers. One of the unique aspects of the company is that although Wells Fargo as a corporation is huge and very well known across the country; each of the individual branches within the different divisions is fairly small. Also, because they are still a growing company in Michigan and there seems to be very little advertising, nearly 100% of their customers are current or former customers

looking for a different way to structure their debt. The pay structure is also advantageous and fairly unique for financial industry sales employees. Currently, the employees earn a base salary, but also have the potential to make a bonus each month depending on the dollar and unit sales. Through interviews with both my direct branch manager as well as with the district manager for the area, I hope to learn more about how the two managers motivational techniques compare to the Herzbergs Two-Factor Theory. I think it will be interesting to see how these two managers, who are both very close with their employees, approach the issue of motivation differently. The next company I am interested in interviewing is Cambridge Mortgage Corporation. This is a company that I am fairly familiar with as well. A few years ago, I worked for Cambridge as a Loan Processor, sparking my initial interest in the mortgage and financial industry. Cambridge Mortgage also has a unique structure in how they

work and operate as an organization. The owner of Cambridge Mortgage Corporation also owns Century 21 Town & Country, a real estate company. Therefore, the way the business operates is to have at least one loan officer from Cambridge in every Town & Country real estate office. This is the primary way Cambridge has built their customer base over the years. One of the major differences between Wells Fargo Financial and Cambridge Mortgage is that Cambridge is able to offer mortgages on purchases and works primarily with homebuyers and sellers. The financial division of Wells Fargo does not offer mortgages of this sort and focuses mostly on the debt consolidation and refinancing side of the industry. The first person I hope to interview is the woman I used to work for. She is a loan officer that works individually in one of the real estate offices. Although her title is not one of a manager, part of what is required in her position is the

ability to keep herself as well as those working for under her motivated and energized to continue to produce business. The second person from Cambridge is the General Manager that works out of the central or main office for the company. Im sure that the motivational styles and techniques will be extremely different for a manager that is attempting to motivate employees that they do not see on a regular basis. Although Im sure there is a great deal of contact between the two, it is a much different task to try to motivate someone and then send them on their way, rather than being able to monitor their moods and progress. I imagine that the techniques I find the manager from Cambridge using will be much like those of the district manager at Wells Fargo Financial. I will be interested to learn how the manager approaches motivational techniques in an effective manner with only sporadic contact with the loan officers. What techniques seem to work well in the organization as a whole is also of interest. The third company that I am interested in interviewing and comparing is ABC Bank, who has asked that I keep the companys name confidential. Over the years, the banking industry has evolved a great deal from a simple customer service approach, to one that is more sales-oriented. With this company as well, I am hoping to interview two managers/leaders at different levels to see how they might differ, and also which level focuses on the area of motivation more heavily. I am interested to see if the branch manager focuses more on the idea of motivation, than perhaps the shift manager/personal banker. Simply due to their position or status in the company, one may select different motivational technique or feel that some are more important than others. With each interviewees consent, I was able to tape-record and transcribe each interview so that I can more easily analyze the techniques or motivational stance each

manager takes. (All of the transcriptions are available in the appendices for further review.) I wanted to keep the interviews fairly short, so as not to interfere too much with the managers daily routine; however, I did want to give them the opportunity to expand on each idea as fully as they felt necessary. Do to the natural limitations of doing a study of this sort, I tried to avoid specifics about the managers/leaders themselves, as far as years within management and well as years with their current company. I want to simply try to get a picture of how the motivational styles these managers tend to use are effective within the environment and organization. Also, more specifically, I wanted to see if

these managers may be following and applying some of the ideas and principles of the Herzbergs Two-Factor Theory without actually knowing the theory. To gather enough data to draw my own conclusions, I developed a seven-question interview composed of fairly open-ended questions that would give them the flexibility to expound. I wanted to avoid steering the interviewee in a specific direction as to the sort of response I was looking for; rather I wanted them to speak freely and openly about each topic and their own experiences and views. The first two questions are meant to help me have a clearer picture of what the company represents from the managers point of view and as well as to discuss the general environment, culture, and dynamics of the offices and the company as a whole. I did not want to rely on my own perception of each organization based on my own experience with them. Most of the other questions are directly related to the different motivational styles that have been established within the company, but also the managers views on which styles or techniques may be more effective and productive in the given atmospheres.

The following questions were used with each interview subject.

_ Please give me a brief description of the company and what product or service it offers to the consumer. _ I would like to know a little bit about the work environment, as far as the physical setting, and the general background and work experience of your employees. _ What do you feel best motivates the employees? _ Do you think that employees distinguish between financial and non-financial motivators? Which motivators cause employees to respond more productively? _ If the company were experiencing a time of limited resources, what would be the prime variable or motivating factor that your company would use? How effective would it be? _ In your opinion, how do employees in your work environment respond to different motivation styles or techniques? _ Do you think that your own experiences with different motivating factors and styles effects your perception of what will be effective for your own employees?

For the most part I was able to simply read the question and the interviewee would respond according to their own impression about what is being implied. As with any live research study or interviewee, however, there is no way to determine how each interviewee would respond. For each manager I tried to make it clear that these were open-ended questions looking for them to respond according to their own assumptions and experiences. Although some of the interviewees did ask for clarification on what the question was asking for, I tried to keep my responses as simple as possible, rephrasing the question, so as not to lead or guide their response in any way.

Interview Analysis Dan Maurice, Branch Manager Wells Fargo Financial (Appendix A) Dan Maurice is a fairly new young manager that has just moved into the area to run the newest branch in the district. It is interesting to see how some of his motivational styles seem to touch on some of the principles of the Herzbergs Theory, however only on the surface level. I think with more experience and over time, Maurice will be able to channel the energy to motivate his employees specific needs with the correct or most

appropriate approach. After asking for a clearer understanding of how the company operates, the hierarchy involved, and the dynamics of each office, I went straight into what most interests or seems to motivate the employees he oversees. Without hesitation, Maurice responded, in this industrymoney. He then went on to clarify and say that for most people, and his employees specifically, money and the bonus structure they have in place is the best and most direct motivator, however that the second would be a pat on the back, recognition, getting your name in lightsit definitely depends on the employee though. You have to find the best motivator for each employee and that can sometimes be the most difficult part What is interesting is that when compared to the Herzbergs Theory, salary is one of those factors that effects the dissatisfaction one feels, whereas, recognition, the second best motivator, is one that effects the satisfaction. It seems to make sense that an employer would find ways to adjust the pay, simply to get the employee involved and content with the position one holds and the work that they do. On the other hand, to keep the employee satisfied with their performance and position

there must also be another level of motivation; the most common is that sense of recognition, an intangible reward. Another interesting aspect of Wells Fargo Financial that Maurice touched on, also leaning towards the idea of effecting an employees satisfaction was that people are often working towards a promotion. He mentioned that this was especially the case when there was no bonus program; the employees relied solely on their salary. The possibility of growth and advancement as motivational factors are two that Herzberg mentions can be very effective tools in improving satisfaction as well. Through my own experience with Wells Fargo and through the interviews Ive conducted, I have learned that this company is one that really encourages their employees to move up in the hierarchical ladder. New college graduates are hired in to a sales position that is on a management track. Within two to three years, the hope that Wells Fargo instills in people is that that individual will excel to an assistant manager level and ultimately have the knowledge, skills, and ability to run and operate their own branch as a manager.

Tim Thomas, District Manager Wells Fargo Financial (Appendix B) Tim Thomas was the second interview I conducted from Wells Fargo Financial. Although many of the comments were similar to those that Dan Maurice had mentioned, it was interesting to hear them from a different level of authority and a different perception. As a District Manager, there are different goals. Again after asking some general questions which can be referenced in the appendices, I went right into what Thomas feels is the best motivating factor for his employees. He responded, I would like to think that it would just be a job well done, but monetary compensation is also very important. I would think that many employers would have this same mentality, howeve r understand that it is not always realistic to presume. If you would have told me five years ago that it was as monetary as I now know it is, I wouldnt have believed you, but Ive seen it first hand. Thomas also explained the reason for the salary plus commission or bonus

compensation structures a little more in detail to clarify the companies idea and intentions. If you are based on 100% commission [as so many financial institutions are these days], and your job is to act in the customers best interest or act on their behalf, it can be a conflict of interest really. Therefore, the base salary part of commission should be enough so that the person is not going to worry about feeding themselves or making their rent payment that month. This idea is one that although seems to work in the employees best interest, Herzberg might say that it is one that only effects the dissatisfaction that that individual feels. Again this idea falls into the same category of salary, but also ones personal life. These things will not have an impact on the true satisfaction one feels with their job and their career for that matter.

One of the most interesting topics Thomas mentioned was the different kind of rewards or ways the company shows individual and team achievements. Every branch has different team as well as individual goals per month and quarter. Although the bonus structure is one of the techniques Wells Fargo uses to motivate its employees and has proven to be extremely effective, the company absolutely recognizes that there is more than just the dollars and cents. Therefore the company as a whole tries to address those more personal or intangible techniques to motivation as well, such as a plaque or a gift certificate for winning a contest for number of loans or dollar sales. Individual-based rewards to highlight that persons achievements is sometimes all a person will need. As a more team-based approach, Thomas mentioned that one of the things his district takes pride in is a football award that goes to the branch that has the best month. between the walnut base and the football itself, the cost is maybe $90.00 [However] that $90.00 will help motivate more business over the course of a year, than certainly $90.00. Thomas seems to have a good understanding of not only the differences between the team versus individual rewards and incentives, but also the differences that make up each of the employees that he oversees. Thomas referred to a book he had been reading directed towards question based selling techniques and the skills as well as the ways to steer and encourage employees in a sales environment. The book refers to two different motivators. The first is known as the German Shepherd, which could be compared to Herzbergs extrinsic motivators. These are those individuals that need to be pushed and constantly have someone nipping at their heels. The second are the Gold Medals. These motivators seem to be more comparable to Herzbergs intrinsic factors, in that they rely

more on the individuals innate desire to do well and to excel. Thomas very honestly admits that in most cases, people need both.

Laura Leavenworth, Loan Officer Cambridge Mortgage Corporation (Appendix C) As I mentioned before, Cambridge Mortgage is an affiliate of Century 21 Town &

Country and works very closely with each other and their customers. Leavenworth has had the opportunity to progress through the company and although her current title is not that of a manager, she has held positions of management throughout her career. Within the first few questions of the interview, Leavenworth explains that there is one loan officer from Cambridge Mortgage in each of the 16 Century 21 Town & Country real estate offices. The employees (processors and closers) that do all of the work after the loan has been sold to the customers are located in a separate main office. Laura Leavenworth is one of those loan officers; however she has an employee (processor) onsite due to the high volume of loans that are produced in her office. Leavenworth had a unique response when asked what she feels best motivates the employees with which she works; she mentioned that she has always tried to motivate other people by treating them with respect and as equals. I ask rather than demand things. As I mentioned, Leavenworth has been in the industry for quite some time and has had the opportunity to work in many different positions and with many different personalities. She seemed to touch right on one of the factors that Herzberg says is a factor that effects ones dissatisfaction, the personal or working relationships. Although, it is a positive and efficient approach to working with coworkers and employees, this technique will not single-handedly effect satisfaction. Leavenworth went on to say that in a company where the sales employees/loan officers are paid based solely based on commission, employees need to take pride in what they do and their work. The financial industry is so competitive that if you are only in it

for the money, she does not feel that you will succeed. A newer employee may start off [in the industry] as a money thingbut it becomes more of a self -rewarding thing. She also mentioned that the people she sees in the company that are truly successful arent looking at the compensation. You can have all the knowledge in the world, but if you are not a self-motivated person you are not going to do wellin the financial industry especially. Another key point Leavenworth mentioned in her interview was that as a manager or leader, you have to teach other people to know as much as you do so that they can advance and take pride in what they are doing. The best way to motivate people is to give them more and more information, not keeping it all to yourself. I felt that this said quite a bit about Leavenworths approach to managing not as a dictator, but more in the approach of a teacher, guiding the employee. I also feel this can be directly related to Herzbergs idea of employees feeling responsible for their work and therefore taking pride in what they do. This factor of motivation is one that will surely effect satisfaction and will ultimately leave the employee with a feeling of self-worth and success. Leavenworth insists that if the employee is unclear about what or why they are doing a certain task they will not feel that their job is beneficial to the company and to the end result. This seemingly simple approach could guide the employees to a very productive day in the office as well as in their future career.

Tony Abate, General Manager Cambridge Mortgage Corporation (Appendix D)

Tony Abate has a very similar approach to motivation as Laura Leavenworth. I am curious if this is partly due to the number of years that they have been working together. Abate is the manager and supervisor of the employees located in the main office for Cambridge Mortgage, as well as, what he referred to as the satellite real estate offices that house a loan officer in each. It was interesting to see how his approach may have differed due to the proximity or lack of proximity to his employees. One of the first things Abate mentions is that recognition for efforts or for a job well done are the best ways to motivate employees in any field. Although hesitant to sound like a manager, he felt that making an individual feel like they are part of the overall machine and that they are genuinely contributing to what is going on is most important, letting them see the bigger picture. The recognition, although most useful for the employees that work in the main office with salaried compensation, Abate also feels that along with the commission the loan officers receive, there is also a need for recognition and acknowledgement. Along that same line, Abate continues to say, the monetary recognition, although important and distinguishable from the other type of recognition, can tend to be short lived if that is the only kind of recognition out there. Herzberg Theory makes a very similar point. Salary, one of the hygiene factors will do nothing more than keep an employee from being dissatisfied with their work and that dissatisfaction will only last as long as the salary or the bonus. There needs to be something more long lasting. In order to effect the satisfaction one feels with their work, something more personal that the

employee can take pride in will leave a longer impression. The idea of recognition or the feeling that they are making a contribution to the final product or service is extremely important. They are not just moving paperwork through a machine, but they are maybe helping a first-time home buyer get into their first home, or helping someone that has had some real financial difficulties get over a hump and get into a better situation. Those employees that find self-worth and commitment are the ones that they see excel in the industry and advance through the company into different positions. This also, according to Herzberg, is a sign of satisfaction, the possibility and opportunity to learn and grow within an organization into different levels. Lastly Abate mentions two things that he tries to do from a motivational and recognition standpoint for all of his employees both within the main office and located in those satellite offices. The first are things that are needed for the benefit of the individual employee. He tries to identify those aspects of the persons work that go above and beyond the expectation or that are unique, and rewards them accordingly. The second area that Abate tries to identify and acknowledge is the reward for group or team accomplishments. He has found that whenever they are able to get the whole group together to do something outside of the office, the camaraderie within the office the following week is terrific. It is a whole different degree of synergy that is developed.

Bonnie Andrews, Personal Banker *ABC Bank (Appendix E)

Bonnie Andrews, though not in a position of management just yet, has worked for the company for quite some time and is now holding the title of a personal banker. After speaking with her, she seems to be one of the most knowledgeable people in the branch and is an assistant to the office manager. Andrews has definitely taken on a leadership role because of her seniority with the company and has a very interesting perspective and motivational style with her coworkers. I was curious to see how managers within a banking industry may differ in their styles of motivation from those in a financial institution. Although they difference between the two may not be so evident at first, I think the dynamics of the office, and the incentives are becoming more and more alike. The banking institutions are directing their employees more and more to the salesdriven approach; therefore the incentives and motivators have altered slightly as well. Andrews described the office dynamics and hierarchy simply to help me better understand the atmosphere and to understand the context in which different motivational styles and techniques are used. There are many more employees, each with different roles and obligations, than I might have thought of initially. Therefore when asked what she feels the best motivator for the employees around her seemed to be, although she mentioned the monetary compensation as many have so far, she also mentioned the idea of flexibility in the schedule. Many people in the office are hourly employees and are not necessarily doing this as a career. Therefore, Andrews mentions that they need to find what will motivate each individual depending on their needs at that time. We use contests and different promotions to motivate each individual differently. Through

discussion, it seems that the rewards are often different depending on the employee as well. One of the things they offer that seems to work well is the opportunity to get a paid day off work if they meet their quota or a dinner out on the branch. Again she reinforced the idea that it depended on the needs of that employee. It is important to know what incentive or program or motivational technique is better for each individual. Some people work for different reasons. Andrews mentioned that it is often difficult to keep people when they are compensated on an hourly basis in the banking industry, because they feel that there is always something out there bigger and better. What this institution tries to show those employees is that there are career advancement opportunities within the company that may suit them. As a company they also seem to be very understanding of peoples situations and try to cater to those needs and encourage them with incentives that meet those needs. Looking to Herzbergs Theory, these are all very good incentives to keep individuals satisfied in the workplace. They feel that if an employee needs to leave for reasons such as money or compensation, they will know that that is the only reason, because they have tried to create a very warm, friendly, and family-oriented environment addressing those other needs as well as they could.

Tracy Recendiz, Office Manager

*ABC Bank (Appendix F) Tracy Recendiz has been in the banking and financial industries for nearly 18 years, and has been with this institution for 14 of those years. Therefore, it is obvious that she has had the opportunity to learn and experience many different things both as an employee and now as a manager. Recendiz was able to clarify any confusion with the hierarchy of the organization and the environment that they have worked to create within the branch within the first few questions, then went on to expand on how the company as a whole and the branch uses a variety of different motivational techniques to cater to each individuals needs. Recendiz described the techniques and styles of motivation based on the level, whether it was region-wide or just within the branch. One of the most immediate and direct motivators are the monetary rewards for referrals. These incentives are mainly geared towards the customer service representatives, also known as the bank tellers, who are now commonly required to engage in sales efforts more than before. She also explained the different motivators that the region initiates as well as the branch itself each one geared to reach different goals and individuals in a different way. Some of the rewards would include dinners out, or tickets to a show with the branch, however she also acknowledges that these incentives dont always work for everyone. Ive learned that everybody has a different motivationThe other really big motivation factor is not necessarily money or gifts, they just want the recognition. They just want everybody to know that they are doing a good job and that you are proud of themYou will be

amazed that when they get that certificate and maybe a little pin that shows outstanding customer servicethey just beam. In general, what is most interesting to me is that Recendiz, along with the other managers and leaders are able to differentiate between the different needs of their employees. They all mention that although it is the most difficult part it is essential to providing a solid and profitable environment. This institution, compared to most others, really seems to cater to the needs of the individual employees and looks to find the motivational technique that works best for each. Recendiz, especially works towards promoting an environment that acknowledges peoples efforts and achievements, not through tangible monetary rewards, but more through the recognition and increased responsibility. All of these efforts can be directly related to the satisfaction and dissatisfaction factors of Herzbergs Theory, though I believe it is obvious this institution tries to focus more on the intrinsic factors effecting satisfaction.

Conclusion Overall, it was fascinating to see how different managers and leaders approached the issue of motivational styles and techniques relevant to the institution and the dynamics of the company that had already been established. It was also interesting

(although I was not asking the number of years experience - it was most times obvious) to see how some of the more experienced managers viewed approaches and incentives differently. They have had the chance to see what works and what does not and have learned quite a bit from the managers they have worked under, but also from the experience they have had. The different motivating factors seem to reflect the companys compensation structure as well. It was interesting to see the differences that existed depending on the hourly, salary, or commissioned based compensation. This experience has taught me quite a bit about the challenges of management, especially in an industry that has become more and more competitive over the years. I was pleased to see that all of the interviews acknowledged that every individual employee is different and will undoubtedly respond differently to the variety of motivational techniques the company may use. It is difficult, though essential, for them to not only acknowledge those differences, but try to cater to them. They can not expect that all employees will respond productively to the same motivators. Finally, the most important correlation that I was looking for and seem to have found, is the degree to which these managers at different levels and companies may be applying the theories of Herzberg without actually knowing the factors specifically. It was fairly simple to draw conclusions about whether or not the techniques or styles could be applied to the factors with the Herzbergs Theory, however it was more difficult to see

whether they may truly understand the implications. The Herzbergs Theory emphasizes that there are different factors that need to be focused on to address different needs. As I have mentioned before, the factors used to effect satisfaction are not those that will have an impact on dissatisfaction. I was surprised and interested to learn that all of the managers mentioned both kinds of factors from Herzbergs Theory, motivation and hygiene. However what was more interesting was to see how each applied and introduced those factors to their employees. Although, all of the interviewees mentioned the need for both tangible and intangible, or monetary and non-monetary benefits, I am left curious as to whether they are aware of how these factors, according to Herzberg, effect the employees overall satisfaction or dissatisfaction with their jobs or careers. The intentions of this thesis project were simple to become more aware of the differences that exist between motivational techniques and companies within the financial industry, an industry I have learned quite a bit about and which I will be pursuing a career. I am pleased with the effort I have put forth, and hope that I will be able to enlighten those that may read this in the future. The appendix, though seemingly lengthy, is the heart of this project and will establish a clearer illustration of each company, the employees within, and the motivational techniques or styles most commonly used. Finally, I would like to leave you with a statement from Frederick Herzberg himself that not only encapsulates his theory, but also has been enforced through this

study (Leach, 2000). "Managers do not motivate employees by giving them higher wages, more benefits, or new status symbols. Rather, employees are motivated by their own inherent need to succeed at a challenging task. The manager's job, then, is not to motivate people to get them to achieve; instead the manager should provide opportunities for people to achieve so they will become motivated."

APPENDIX A INTERVIEWEE: DAN MAURICE, BRANCH MANAGER COMPANY: WELLS FARGO FINANCIAL DATE: APRIL 1, 2005 TIME: 10:00AM LOCATION: WELLS FARGO FINANCIAL ANN ARBOR, MI INTERVIEWER: SHANNON RILEY Shannon: Please gives me a brief description of the company and what product or service it offers to the consumer. Dan: Wells Fargo Financial is a multi-billion dollar financial services company. We operate in a number of different lines, all within the basic financial services and any aspect of it. My particular division, Wells Fargo Financial, we offer loans to individual consumers, no business or commercial loans. Individual consumer loans, whether it is credit cards, unsecured loans, auto loans. Primarily we focus on mortgages, real estate secured consolidation loans. Shannon: First I would like to know a little bit about the work environment, as far as the physical setting, and the general background and work experience of your employees. Dan: Most of our offices are located near a mall. They are usually anywhere from 3-12 employees, one manager, typically an assistant manager, a loan processor, and the rest would be trainees, full-time sales people. Most of our employees do have a college degree. It used to be a requirement to have a degree to be employed here, but it is recommended. Work experience, from that standpoint, most of the people that we hire dont have extensive experience within the business. We like to hire a lot of college graduates so that we can kind of mold them and fit better within our corporate culture. The atmosphere of the branchesfor the most part they are generally young people. I dont have any stats on it, but generally they are pretty young. In our office everybody is under 26 years old, except for one employee. There are some offices that have a 23 year old manager and the employees are 21-22 and there is nothing wrong with that whatsoever, it is just a little tuff to build credibility sometimes if you have a young look to yourself. The company has also a hire or promote from within philosophy. Everybody from myself up to the president has started at the same position, so there are a lot of employees that have been around for a long time. They have developed a sense of ownership and pride in the company. Shannon: What do you feel best motivates the employees?


Dan: In this industrymoney. I think money is the best motivator. The second motivator would be a pat on the back, recognition, getting your name in lights. Shannon: Do you think that employees distinguish between financial and nonfinancial motivators? Which motivators cause employees to respond more productively? Dan: Definitely. You could build momentum with just congratulating somebody on doing a good job on something little. While at the same time you can say look what you missed out on by not maxing out your bonus and seeing what the other people did. Look what you missed out on. You can distinguish between the two, but if you use them both together it can be very very effective. It definitely depends on the employee though. You have to find the best motivator for each employee and that can sometimes be the most difficult part, just finding what will work. I would say that money still is what makes people in this industry respond more productively though. We just rolled out a new bonus structure, even two years ago when we first instated bonuses; the company made a huge jump as far as production goes. It used to be that you do your job and do it well and get recognized. There were definitely people that thrived on that and wanted to be the best just because thats the type of person that they were. Now when you throw money in there, it is amazing what everybody will do. You still have those people that want to be the best and will do what they can to do the best, but then you also have those that want to get paid so they are working really hard to get the money. Shannon: If the company were experiencing a time of limited resources, what would be the prime variable or motivating factor that your company would use? How effective would it be? Dan: If we couldnt pay people anymoreor cut it down significantlywe have a lot of other things that we do to try to motivate from within. I think that it all depends on how its drawn down from the top. You have got to get people to know that if they do these things, if they max out their potential, or if they are number one in this category, or they make the top ten or whateverthere is going to be a monetary rewardeven if its just in the effects of a promotion. Those are basically the things that people work for. Before there were bonuses people would work towards a promotion and thats how you would get more money, you would have to move up the ladder. That stuff is effective, it does work. I know it does. Its worked for a lot of people that have stayed with the company for a number of years.

Shannon: In your opinion, how do employees in your work environment respond to different motivation styles or techniques? Dan: Everybody responds differently to everything you try. You have some people, like we said before that really like the money. There are others that really like the recognition. Some people respond to negative

reinforcement and others respond to positive. Its just a matter of trying to figure out what is going to work best with certain peopleits a pretty tuff thing to do. In my opinion, you have to do a little bit of both with everybody. Youll make a mistake sometimes, but that happens, nobodys perfect. You try and do the best that you can. Bottom line is that we want the people below us to do well and thats the tuff thing with some people. You dont want to make it personal; its just how you are going to help correct something. Its not that I dont like you or we dont get alongits simply that I would like you to do better at this or I would like you to do this from now on. Ultimately, any change we are trying to make on a persons work ethic is to help them improve and advance through the company if that is what they are looking to do. Shannon: Since you give both rewards, both incentives, can you tell with each employee which one theyre striving for? Dan: Ive found that always killing people with kindness in a management position does not work. You will not always get what you are looking for with that. Sometimes you do have to be the heavythe drill sergeant and say this has got to be done and it needs to be done now. You definitely need to reward your people when they do a good job, but the kindness thing wont get you the whole way. Sure they might like you, but they might have a mixed perception of what your role is. They may not respect you though and do what you need them to do. In business it is difficult to be friends and buddies with everyone and still gets the result or the respect that you need to get the job done. My managers in the past have shown me that. I have had both ends of the spectrum and Ive seen what works and what doesnt. Ive picked up on things as Ive gone along. Most of what Ive learned has to do with the combination of both. You cant run a successful business without having both kinds of motivators and personalities. You have to be friendly but still get the job done and you have to pat them on the back when they need it and give them constructive criticism when they need it. On the other hand, no one is going to work for nothingor there are not very many. At the same time people are going to get discouraged if they dont get recognition for what they do. I think that Wells Fargo Financial as a company tries to implement that from the top down too.

APPENDIX B INTERVIEWEE: TIM THOMAS, DISTRICT MANAGER COMPANY: WELLS FARGO FINANCIAL DATE: MARCH 23, 2005 TIME: 3:00AM LOCATION: WELLS FARGO FINANCIAL ANN ARBOR, MI INTERVIEWER: SHANNON RILEY Shannon: Please give me a brief description of the company and what product or service it offers to the consumer. Tim: Wells Fargo Financial is a consumer finance company that offers a variety of different lending products, mortgages, both first mortgages and second

mortgages. We do unsecured lending, lines of credit, Visa/Mastercard, as well as retail financing. Shannon: First I would like to know a little bit about the work environment, as far as the physical setting, and the general background and work experience of your employees. Tim: Our typical office, consumer office, operates with anywhere from five to seven employees. It will be a store manager, a loan processor, and in an environment of say six employee office, there may be four management trainees, who are also known as account executives. The store manager and the account executives are responsible for the sale end in generating new business, lending products. The loan processor is responsible for the administrative and clerical side to help support the account executives and the managers. The culture would be very much a team oriented environment, where it is important that people be able to work together to support each other. There are a lot of inbound calls, as well as, outbound calls that are made throughout the day and because you can only be on one call at one time, it is important that other people, not have any incentives necessarily or ulterior motives to undermine someone elses sales success. So really, having people that are similar types of personalities works well because they tend to be able to work well together. A lot of our branches, people do social things outside of just the work environment because of that natural camaraderie that we try to develop. Typically what we do, the account executives, which is the majority of the employees that we have in our sales offices, would be employees that have, again this would be typical, but not exclusive to, somebody that will have a college degree, and will either be recruited right out of school or be maybe one or two jobs out of college with some type of background with sales or customer service or both. These individuals, if they are recruited right out of college or out of college within a year or two, we take a look

at their academic background as far as GPA, what type of curriculum or major they were involved in and then we try to tie that in with what it is that we do which is a sales environment. Shannon: What do you feel best motivates the employees? Tim: I would like to think that it would just be a job well done, but monetary compensation is also very important. There has to be some type of a character or medal performance out there in addition to just hey I did a good job and I worked hard today. Part of the motivation has to be a balance of that person wanting to do well because they just have an innate desire to feel good about themselves, but the other motivation should be some type of a reward system. That reward system could be any type from monetary, to promotional and looking at it from a long-term career standpoint. Shannon: Do you think that employees distinguish between financial and nonfinancial motivators? Which motivators cause employees to respond more productively? Tim: I think so. I found that out because in the last two years we have gone

from much more of a monetary compensation based formula, where as, even two to three years ago, compensation would be based on performance over a quarter, a three month period, and that individuals reward would be a percentage increase in salary. That might range anywhere from three to eight maybe ten percent if they did exceptional on a quarterly basis. Well, if you really factor that out based on a starting salary of say $30,000, all of the sudden those increasesits not a phenomenal amount of an impact on a paycheck. Once we decided to change out compensation structure so that people would be compensated with lump sum payments, not just a small percentage of salary that gets factored out over an entire yearwhen they saw that there was a reward and a sizeable reward, those results increased dramatically. So that tells me that there is a lot of monetary compensation incentive out there in addition to people just wanting to do the right thing. If you would have told me five years ago that it was as monetary as I know it is now, I wouldnt have believed you, but Ive seen it first hand and a lot of i t has to do with greenbacks. The way we try to measure that is peoples achievement background. If we have someone that is motivated by just doing a quality job that is terrific. Thats a starting point. What we try to measure that by is what kind of achievement and competitive background do they come from. Somebody who has been involved in athletics, typically they are going to be driving towards goals constantly. Same things with somebody that might be involved in a prior sales job that was based in part on a bonus or commission program. Those individuals tend to already have that orientation towards a goal.

There is an important reason for the salary plus commission structure. If you are based on 100% commission and your job is to act in the customers best interest or act on their behalf, it can be a conflict of interest really. If I am on 100% commission basis, I am worried about putting bread on the table for my family and myself. Every customer that I have that says yes helps me to know whether or not Im going to be able to feed my family. Well, right there, all of the sudden, how important is it for me, if Im on that 100% commission, to make full disclosures that may hurt my ability to close this deal. So the base salary part of our job is that the base should be enough so that the person is not going to worry about feeding themselves or making their rent payment that month. But at the same time the bonus payment is set up such that, the person who is selling a lot now can afford the finer things in life. That doesnt mean that somebody wont just go live high off the hog and base their rent payment and their car payment on a higher, or being able to perform at a very high level, but there is less of an incentive for someone maybe to not act in the customers best interest if they know that they have that base salary there. Shannon: If the company were experiencing a time of limited resources, what would be the prime variable or motivating factor that your company would use? How effective would it be? Tim: Then the compensation would go back to what we had done previously. It

would be your incentive is your job. I think that was in a movie several years ago, a sales moviefirst place was a brand new Cadillac, second place was a set of stake knives, and third was you got to keep your job, and forth place was you lost your job. If you dont have those incentives, those monetary incentives, there can still be hey I need to do this, I need to performto keep my job. In addition to that incentives would be to do your job well, or better than just the base line goal, would be if they want to put themselves in a position to move up in my career, which could ultimately lead to salary increases based on different position. Based on what I have seen, it wouldnt be as effective as the monetary basis compensation program. I think its important to have a balance though. If everything were just dollars and cents, we wouldnt have any incentives that would have like branch lunches, like we do. Or we take people out to have a bowling night, or we have reward connection catalog points that people could buy things out off. If it were just strictly dollars and cents, then all it would be is cash rewards for everything. The company absolutely does recognize that is it more than just the dollars that motivates people. Your branch here is a great example because we have this football award that goes to each branch that has the best month in the district. Your branch seems to take great pride in that football. Well the football will cost me, between the walnut base and the football itself, runs be aboutmaybe $90.00 bucks. That $90.00 will help motivate more

business over the course of a year, than certainly $90.00, but its not about $90.00 bucks. If I were to just throw our $90.00 divided by 12 months, and then if you do the math, maybe $7.50. The branch that does best gets $7.50 to divvy up, I dont think anyone would have any incentive at all. This football just seems to have this I would like to think that that motivates people. That even balance of team and individual motivators. We want to have a balance there. We dont want to be so one tracked that we loose sight of whats important here, and thats taking pride in what you do. Thats still important even though we have found out that performance levels increase dramatically when you throw in financial incentives. Shannon: In your opinion, how do employees in your work environment respond to different motivation styles or techniques? Tim: This totally ties into this QBS Selling book, Question Based selling, by Thomas Reeves. He calls it gold medals and German shepherds, its one of the sections in this book. What it is is thispeople are motivated by gold medals or German shepherds, but in most cases a little bit of both. What he means is gold medals are the reward system and the German shepherds are the punishment system and the analogy is that Olympic sprinters, the world record sprinters, get to that level of performance based on competition and just wanting to beat other people to the point that they achieve this goal medal. Would that runner go any faster if they had a German shepherd viciously nipping at their heels? The answer is, I dont know, but there are certain people out that would run

faster if they had a German shepherd running after them or would they run faster if they just had this competitive reward system out there. The answer is that the Olympic and world-class sprinters are running as fast as they can because thats what they do. Other people out there might need that German shepherd out there to run as fast as they can. In any type of professional or academic environment, some people are motivated by what would happen bad if I dont accomplish this. Other people what to accomplish this because of what could happen thats good. I like to base systems on gold medals, but what I find as I move along in my career, is that it is sometimes a person that doesnt what, say example Justin in your officehe doesnt like it when I call him up and say hey what happened this week? He hates that call, and I know that that motivates him, that if he has another bad day Tim might be calling. That does motivate people. Thats one of the things in my management style that I probably need to balance out better, is that it is not always RAH RAH RAHthere are some people that just need on occasion, hey whats going on here, if you are not getting the results that you are capable of? In most cases those individuals know what they need to do to correct it, but the fact that somebody in a position of authority is challenging it or them, they will then implement what they know needs to be done. It is difficult and you

have to understand that everyone is motivated just a little bit differently. Everybody has a different mix of those gold medals and German shepherds in them, and you have to tie that in. There are certain individuals that I know if I make that phone call, like I do to Justin, and have the same tone, there are individuals out there that that will wreck their day and they wont be able to concentrate on their work that day. They might have a little bit of a fragile personality in terms of how thickskinned they are and how much constructive criticism they can handle. Other people you could kick them in the shins and they are like ok thats fineI understand why you did that and get right back to work. Everyone is a little bit different. There is an analogy that a district manager I knew from when I first started with the company, he said that as a district manager you have a key chain. On that key chain is a key for each employee in your district, and each of the keys is a little different. You just cant take one key for one person and try to apply it to somebody else, it just doesnt work. Even though they may have a lot of similarities, everybody is a little different. Shannon: Do you think that your own experiences with different motivating factors and styles effects your perception of what will be effective for your own employees? Tim: Absolutely. I would say that I have taken each of the individuals, or supervisors that I have worked for and evaluated at some point what does he/she do thats effective and what does he/she do that is not effective. Ive tried to make that part of the way that I manage. Every once in awhile I catch myself doing something that was a characteristic that I didnt like of one of those supervisors. But hopefully, if I do an effective

job, it was because of I was able to say, here are some techniques that have worked, Ive seen other people use them in the past and Im going to implement those myself. I try to take a little bit from everybody, but there are some people that I have worked for that are more effective than others, and those are the ones that I try to emulate the most. I would say is that the biggest thing is that you have to have balance, and you have to be able to use a two handed approach, which means that if you are going to criticize somebody, if at all possible you should find something positive in what they are doing as well. In other words, it would be really easy for me to go in and be a critic of anybody. All of us could have something criticized. I would have a lot more credibility with that constructive criticism if I could say here are some things you are doing really wellhowever here are some things you are not doing well. Lets talk about what we can do to get you doing those things good as well. Otherwise, a lot of individuals will feel like you are attacking them if you dont acknowledge what they are doing well. I think thats something that I have learned from one of the first district managers that

hired me, here eight years later as a district manager myselfit has always stuck with me that he said be sure that you are acknowledging the good things in these people as well.

APPENDIX C INTERVIEWEE: LAURA LEAVENWORTH, LOAN OFFICER COMPANY: CAMBRIDGE MORTGAGE DATE: MARCH 16, 2005 TIME: 9:30AM LOCATION: CENTURY 21 TOWN & COUNTY NORTHVILLE, MI INTERVIEWER: SHANNON RILEY Shannon: Please give me a brief description of the company and what product or service it offers to the consumer. Laura: Brief description of Cambridgewe are a real estate owned Mortgage Company that caters to people purchasing homes through Century 21 Town & Country. Shannon: Can you expand a little bit on how Cambridge and Century 21 are associated? Laura: We are associated because we have the same owner. So the owner started the company just so that the agents would have a reliable source to get their mortgages. Shannon: First I would like to know a little bit about the work environment, as far as the physical setting, and the general background and work experience of your employees. Laura: Loan officers are in individual real estate offices and the employees that do some or all of the work are all located in a separate main office, the manager of everybody is also located in that separate main office, except for me, I have an employee here on site. Shannon: As far as the work environment in that other office, I know you started

there right? How is that office set up? Laura: Over in the main office there are a group of people that process loans, and close loans, and each of them have one or two or three loan officers that are out in those satellite offices. They are responsible for working with those loan officers and making sure that their files get underwritten, approved, and have all of the documents that they need in order to close. There is some dialogue with customers, some dialogue with real estate agents, and then they have managers that oversee them. We also have our after closing department, which is a large part of the industry that most people dont realize. Gathering up all of the closing docs and making sure that money goes everywhere that it is supposed to go, and getting loans

sold off to our larger investors. Then they each have different supervisors and then theres the manager. Shannon: So then what is the hierarchy like? Laura: Theres one manager, and then there are two assistant mana gers, each of them probably have six or seven employees that work for them and do actually all of the legwork. Those employees are also accountable or responsible for stuff that goes on with the loan officers in the satellite offices. So while they dont directly report to them, they are obligated to work with them, somewhat, and take direction from them on what should be done or what shouldnt be done on certain files. So they are essentially taking direction from two different sources. Jessica here, even though she is my employee as a loan processor, and I have Sharon over in the main office who works just for me for doing closing packages, they still report to another manager as well. Shannon: This is sort of a unique situation, but what do you feel best motivates your employees? Maybe you could talk about those two that work specifically for you and your deals, but also you as an employee under some guidance from the main office. Laura: I motivate other people by treating them with respect and as equals. I ask rather than demand things, typically, and I wont ask any employee to do something that I wouldnt or havent done myself. Many times if there is a lot more work that needs to be done on that side, I will do what somebody else will do, or somebody elses job. Im not better than any other person. On the other hand, what motivates meis having to be the best. Its more of a self-fulfillment thing for me. Shannon: Do you think that employees distinguish between financial or nonfinancial motivators, or monetary or non-monetary motivators? Laura: Do I feel that they differentiate? I think that it depends on the employee, and on the relationship. The employees that I work most closely with, I think are also motivated to do a good job. I think that money is something that everybody needs, but money is not the primary reason for people necessarily doing a good job. Shannon: Which motivators cause employees to respond more productively? Laura: For the loan officers with Cambridge it is entirely commission based, but I think that the employees respond more productively with positive

reinforcement. Again I think that people that are motivated only by financial gain, are not ever really going to succeed. I mean, obviously you know that Ive done quite well, and the money partis notits a little bit

of what motivates me but not entirely. I do not ever sitand there are people who will look athere is this one transaction, here is how much money I am going to make and this is how much I have to make. I do not ever look at a loan as how much money I am going to make. Everything to me is about doing the most loans, doing the best job on as many loans as I can do. Its being able to do a better job than any body else. So maybe for a newer employee it starts off as a money thing, or intriguing at leastthe financial aspect, but it becomes more of a self -rewarding thing. I really dont think though that the people who are successfulthey dont look at the compensation. They look at what others think of themare you an expert or are you not, are you good at what you do or are you not. Thats more important than the money that you make a lot of times. Shannon: Is that something that you have learned though working with Cambridge or just along the way? Is that something that Cambridge instills in people? Laura: I think its more something you learn along the way. Shannon: If the company were experiencing a time of limited resources, what would be the prime variable or motivating factors that your company would use? How effective would it be? Laura: They would probably just have to say, youre doing a great job, were going through tuff timesI mean what else can they do? In this position, as a commission base, I dont know how effective it would be. It would be for me. I dont think it would be for some people though. Shannon: In your opinion, how do employees in your work environment respond to different motivation styles or techniques? Obviously you respond well, simply to the pride in your work, but for some of the employees in the main office, how do people respond to their managers motivational styles? Laura: Usually, they respond quite well. Everybody is different thoughpeople who are not motivated and just have a job to go to work everyday and all they care about is their paycheck are not going to be motivated by anything. Maybe a little bit by that money to do a better job, but a lot of those people are not going to do a better job if they are not going to get more money. So, its so important to find the right people at the beginning. You can have all the knowledge in the world, but if you are not a self-motivated person you are not going to do well, pretty much in any industry, but in the financial industry especially, because it is so brutal and people are not nice. You have to deal with so many personalities. If you dont have the ability to overcome that, or that you dont really care about what you doyoure not going to succeed. I think that the employees at a company that dont have enough pride in themselve s to do

a good job are really not going to do well. I think its really about picking the right people.

Shannon: Do you think that your own experiences with different motivating factors and styles effects your perception of what will be effective for your own employees? Laura: YeahIve had all kinds of experiences, different jobsall within the financial industry, but different companies and the way they treated me as employee or the way I treated my employees has a big effect on things. I know that I have had bosses that were terrible through the years or all they wanted you to do was punch your time clock when you come in and you arent supposed to talk and you arent supposed to ask questions, you are supposed to just be a mindless person sitting therethen thats not motivating at all. Shannon: Have you sort of picked up on the things that you have liked along the way? Laura: Yes, as a manager, I feel you have to teach other people to know as much as you do. Thats one of the main things. You have to let other people know what you are doing and why, and I think thatalthough I dislike the idea of teaching, Ive always found thats the best way to motivate people, is giving them more and more information, not keeping it all to yourself. Ive had bosses that have not wanted to share information, because they felt like you might then know as much or more than they do. Thats not the way to motivate people. You have to motivate people by giving them more things to learn. In this industry, I think that you need to start with the basics, because the money wont be there right away. You need to teach them what is valuable first. Especially in the financial industry that can be very cutthroat sometimes and very low paying when they first start out. I think thats why so many people are in and out of this business so quickly. If you learn all of the things and find the thingsthen yes you have to except that fact that you wont make much money in the beginningonce you get the experience and the knowledge, then the money will be there. When the money is there, you still find that that is notdepending on the kind of person you areI know that there are people that are greedy and are just in this business for the money. I think you find the rest of it I guess if you look for it. Thats the interesting part about the financial industry because every company is different. I think depending on the company; you will have different employees that are motivated differently.

APPENDIX D INTERVIEWEE: TONY ABATE, GENERAL MANAGER COMPANY: CAMBRIDGE MORTGAGE DATE: APRIL 4, 2005 TIME: 2:30PM LOCATION: TELEPHONE INTERVIEW ANN ARBOR, MI INTERVIEWER: SHANNON RILEY Shannon: Please give me a brief description of the company and what product or service it offers to the consumer.

Tony: Cambridge Mortgage is a mortgage banker. We are on the smaller side. We offer financing to the consumer for the purpose of purchasing or refinancing residential property, be it primary residence or a vacation home or an additional property. Shannon: First I would like to know a little bit about the work environment, as far as the physical setting, and the general background and work experience of your employees. Tony: We are an affiliate company with Century 21 Town & Country. We have a primary environment and then satellite environments. At the primary environment, in addition to myself there is a staff of about 18 folks, and at this location, this main office does all of the loan processing, closing, and document preparation for all of the mortgage loans that we do. This office deals with the tail end of the process; the approval of the mortgage and the subsequent closing of the mortgage. There are some post closing activities and quality control type of activities that take place at this location. Where we make the business happen is actually in the satellite offices. Our loan officers have office space in the 16 Century 21 Town & Country offices. Their job is to work with the real estate agents to obtain the mortgage business, forming relationships with them so that there is a level of confidence in the agents so that the agents will want to refer their buyers to Cambridge Mortgage. Their roles are also to counsel the buyer into the different types of financing available, some choices that might be best, and different times how the loan prices might effect their finances, overview of their credit and so on and how it applies to the mortgage process. Once that mortgage application is taken, the loan officer is the point of contact between the buyer and our office and the agent in our office. Being that point of contact, they keep everybody in the loop as far as the status of the transaction, when the loan is ready to close, coordinating the minor details of the closing and so on. Im overall responsible for the entire operation of Cambridge. I do have the day-to-day title of general manager, a corporate title of president, and

an officer in the company. Although I dont personally hold ownership interest in the company. Reporting to me are two department heads. We have an operations director and an administrative director. The operations director is basically responsible for all of the activities that take place in a mortgage file up until the time that the loan closes; the processing of the loan, getting the approval of the mortgage, and the closing of the mortgage fall under her sway. Reporting to her is a staff of about nine folks at this point and time, and this staff are the ones that do the actually physical processing of the loan, work with the underwriters, work with the loan officers, and prepare the closing documents for the loan, and ship them out to the closing which takes place at a title company. Thats pretty much what the operations directors side covers. On the administrative side, the administrative director is responsible for all of the activity that happens after a loan closes, among other day-to-day administrative functions, such as payroll and human resources. After the loan closes, there is accounting

procedures from a funding standpoint, and quality control procedures, errors and omissions procedures to make sure that the closing loan package has all of the necessary documents and that everything has been executed properly and that we are being the appropriate custodian of those files since we have an obligation to keep those records on hand for a period of time. She has a staff of five that reports to her, and for lack of a better illustration, anything that happens to a file after the loan closes falls under her sway. Shannon: What about the general background or work experience of the employees? Tony: For the most part, because we are a smaller company, we dont have the capability to do intensive training where we are training someone from scratch. For the most part, the employees that we bring on board are folks that have been employed in the mortgage business. The employees starting out for the most part have some experience in the industry. We do experience a degree of turnover just like any industry does and from timetotime people are seeking a better environment, or something closer to home, or more money, or stability, or whatever the case may be. In many cases, our entry-level clerical positions, such as the receptionist, those are sometimes filled with people either right out of college or right out of high school. In a couple of cases, those individuals have held onto that role and deemed that thats an appropriate role for them, or maybe they are taking additional schooling while they are working. In a couple of cases, those individuals have grown into the closing and processing roles within the company. So they have basically promoted from within based on their willingness to learn and their ability to adapt to the new role and their responsibility level, as far as their work habits go. Depending on the role, we are prepared to bring folks in that are new not only to the mortgage business, but also to the work force in general. For the bell-curve if you will of the positions, processing, closing, and so on, those are typically not

entry level roles. The department heads both have many many years of experience, as do I. They are basically working off of a combination of time on the job experience and on-going training. We all go to regular training functions that are industry driven. Shannon: What do you feel best motivates the employees? Tony: What I think best motivates the employees that I work with, and this is going to sound so like a manager, but Im going to pull it out anyway, is recognitionfor efforts or for a job well done. Making that individual feel like they are part of the overall machine and that they are genuinely contributing to what is going on and they are seeing the bigger picture. They are not just moving paperwork through a machine, but they are maybe helping a first time home buyer getting into their first home, or helping someone that has had some real financial difficulties get over a hump and get into a better situation. Im going to say that recognition for the employee is primarily the main motivator for keeping folks in a positive light. The recognition that Im talking about is primarily apropos to the staff people here at the administrative office. All of the folks here at

the administrative office are salary compensated. From a loan officers standpoint, and that is the title of those actually out in the field originating the loans, they are 100% commission and to a great deal a part of their motivation is their paycheck and the end of the day which literally changes based on their own input into the job. They work harder, they write more loans, and then the reverse happens too. However, sales folks being what they are, recognition on the sales end even at the higher levels making a great deal, recognition is still very important. We always make it a point on the sales end to point out who the top folks were from a closing and an origination standpoint. Shannon: Do you think that employees distinguish between financial and nonfinancial motivators? Which motivators cause employees to respond more productively? Tony: I think by necessity they do. There are situations where we can create an absolutely wonderful work environment and comfortable atmosphere, and give all of the appropriate recognition that we can and make the person feel really good about themselves, but if we arent meeting their financial needs the individual just has to move on. To that end, I am going to say that they are going to make a distinction because they could leave work very content and happy, but if they cant pay their bills then they understand that. It might make it very tough for them to leave because nobody typically wants to leave a satisfactory environment, but sometimes the finances dictate just that. Conversely, if we are creating a very harsh environment, an environment where there is no degree of empathy to a persons personal situation, poor treatment, poor work conditionsa raise

given on a Monday is often forgotten on a Tuesday. I think that most people will agree that although the financial recognition in the form of raises and bonuses are very important, it is really human nature to cause a persons lifestyle to rise to the level of the compensation. If a person is making 20% more today then they were yesterday, in a relatively short time, most folks tend to cause situations to happen where their expenses tend to rise tremendously. Maybe they will get those extra cable channels, or a nicer car, because now there is a little more money now at the end of the month. To that end, the monetary recognition, although important and distinguishable from the other type of recognition, can tend to be short lived if that is the only kind of recognition out there. Shannon: Which motivators cause employees to respond more productively? Tony: In my opinion, it is definitely the recognition that helps the employees to respond more productively. The market is going to bear what the market is going to bear as far as salary goes. Now with some nuances from company to company, for the most part, a person that does a certain type of position can expect a certain type of compensation throughout the industry as a general rule. From a different standpoint, it is my belief, that if the employee sees the big picture and they know what they are contributing to, and they know that they were a piece of the machine that created the end resultthat is going to cause somebody to be more

productive as opposed to that raise, that I believe after a short period of time, is forgotten about. Now I will add this to thatthere is a st ronger link on the sales side. Heres why I think, to the earlier question that recognition ends up being a better motivator in my opinionthe salaried folks come to work with the opinion that over a short period of time, if they work twice as hard, their paycheck is going to look just the same. There is not a direct change in payroll for the amount of time put in at a desk. Now over the long period of time, the hope is that it trickles into reviews, reviews trickle in to raises and that kind of indirectly works in that fashion. A person that is in a salaried position does not have the ability to directly effect their pay based on their work output. On the sales side, its a different kind of animal, the loan officers being 100% commission, their paycheck will immediately change based on their productivity. Although the recognition is important they see a much larger relationship between working harder and the paycheck being larger and being able to see the difference. Shannon: If the company were experiencing a time of limited resources, what would be the prime variable or motivating factor that your company would use? How effective would it be? Tony: In our environment, you have a couple of mutually exclusive dynamics, where if the originators are motivated to the point where they originate

more, be that through recognition and through financial, then there will be more top line dollars to take care of the salary staff here at the main office. In the event that the resources were really cut backand you actually hit on something that has some truth to it, because in the mortgage industry right now there has been a great deal of layoffs and a great deal of downsizing just because there was way to much capacity relative to the amount of business being written. We are fortunate at Cambridge, that we have not had to lay anybody off If we were in that situation though, you might reach a point where just the recognition isnt going to cut it, a persons going to look for a little bit more. My gut instinct, depending on how severe the time of limited resources was that I would probably structure compensation to be based on profitability criteria. Now we kind of bring that sales motivating process of compensation into the administrative ranks, where we say that if you are more productive then you will immediately see that in your paychecks, because your compensation is a mixture of salary maybe bonus, call it what you will, but something that is relevant to the profit that you are contributing to. Shannon: In your opinion, how do employees in your work environment respond to different motivation styles or techniques? Tony: It really can depend on the employee. There are really two things that I like to do from a motivation and recognition standpoint. Number one: there are things that are needed for the benefit of the individual, the analysis of things that they are doing that is over and above, what are they doing thats unique or specifically a fantastic employee. Coupled with that we try to do some sort of group events, and its never nearly as

regularly as we would like, but we have found that whenever we are getting the whole group together to do something outside the office, it might be something as simple as a company picnic or outing or something like that, there is a different degree of synergy that is developed from that. The next day at the office there is a different degree of folks wanting to help their coworkers in a situation or helping with the workload or something like that. I might define that as more of an indirect motivator. The response from that is something that you might say is more of a feeling of family, and care from within the office. In that case, we benefit as a company because we are getting a little more horsepower under each person because they want to do that. They dont want to see a coworker floundering or buried or anything like that, because there is a feeling of a sense of family. The individual recognition, the response to that is, that any way the employee can feel a sense of involvement and contributing to the final product, they are going to feel more a part of the team. I dont believe anybody comes to work in the morning wanting to do a bad job that would really be a byproduct of something else. If they can feel that what theyre doing is appreciated and is genuinely contributing to something and can see the end result, they are going to be inclined to

duplicate that kind of thing. People want to feel good about what they are doing, and they want other people to feel good about what they are doing. Who doesnt want to be complimented and told that they are contributing and helping and doing a good job? Human nature says that people respond positively to that kind of thing. Shannon: Do you think that youre own experiences with different motivating factors and styles effects your perception of what will be effective for your own employees? Tony: Theres no question. Over time you work with managers of all different flavors and there is no question that you respond differently to how people try to motivate you and then you carry that into your daily work habits. I dont think its any different than remembering teachers that had a special place in our life because of their technique or what they did. Im not a teacher, but I would have to say that the results are driven by a lot of the same things that a student wants to know that they are doing a good job. Human nature just causes people to want to do more than that. I look at the folks that have managed me or mentored me in the past, and even the lousy ones provide a lesson because they give you some insight into what not to do. You get something from everything.


Shannon: Please give me a brief description of the company and what product or service it offers to the consumer. Bonnie: ABC Bank is a financial institution. We offer several different checking and savings products for business and personal use. We have commercial departments, trust departments, mortgage departments, investment departments, and safe-deposit boxes. We offer a variety for all of your financial needs, both personal and commercial. We offer about 80% of all of those things listed here. We have a mortgage representative here, an investment representative here, commercial banker here, new accounts representatives for business and personal, and if they are not here we will call them in here. Shannon: First I would like to know a little bit about the work environment, as far as the physical setting, and the general background and work experience of your employees. Bonnie: As you can see here, most of our lobbies are rather large. On the onsite premises of what we call our banking centers, we have several offices in them. We have a teller or customer service area, onsite ATMs, 2-4 drivethrough lanes depending on the age of the branch. We also have in-store branches that are located inside supermarkets like Farmer Jacks, they are a smaller version usually a couple teller windows and a little desk area. Now as far as employees backgrounds we are diversified. We have employees with different ethnic backgrounds, different nationalities, also different races. That is one plan that they have been working on for quite some time. We are diversified and we are here to help everyone. The experience for most of our employeeswe range from non -college to college degrees even masters degrees. Most of the branches you will find there are probably more women than men. They come from customer service backgrounds, sales backgrounds or some type of financial backgrounds. We do have a lot of moms; a lot of moms work in banks. Depending on your degree or what you have been trained for if you came from another bank, you can move up the ladder pretty easily or be hired right into management. Without a degree or depending on what you would like to do and your background you would start out as probably a

customer service representative and then work your way up to a personal banker, which is my position, and then from a personal banker you could go into office management. Once you get above a personal banker, there are different requirements. You have to have a license to sell securities, so you would have to want to go in that direction to go any further up into management. We do have personal bankers that are licensed to sell securities. Shannon: What do you feel best motivates the employees? Bonnie: Our branch in particular and Im sure this stands true with all other branches, of coursemoney, I would have to say motivates people. I would have to say recognition for a job well done. Flexibility in the schedule is also a good motivatorif you make this quota we will give you half a day off, type of deal. So I would have to say the flexibility of

the schedule, money first and foremost, and then of course the flexibility. There is a base pay hereIm not sure what it starts off atI think its around $9.00 an hour, but you do get incentives. Tellers get incentives for referrals to a desk person. They get paid for checking and savings accounts, loan referrals, investment referrals, mortgage referrals. Once you are a desk person or a platform person in my position, we dont get incentives for the basic checking/savings, that type, we get incentives for loans referrals, business account referrals, and of course mortgage referrals. They are quite nice. ABC Bank is very good at their incentive program and motivating employees, but I think money always is pretty major. Depending on what your position is, some are salary employees, but the employees in the branches are customarily hourly plus and incentive programs. Shannon: Do you think that employees distinguish between financial and nonfinancial motivators? Which motivators cause employees to respond more productively? Bonnie: Yes, I do. Some of them, depending on the individual, some of coursewell all of them like the money, but there are other things. A lot of them do work towards that Wow, I can get a day off Thats a real big incentive. I do believe that people notice the difference. They seem to work a little harderwe have a lot of contests. We use those contests and different promotions to motivateI think those work for some individuals who are competitive. Then you have the individuals who are overwhelmed and they are doing their job and they are doing good but they dont have time to participate in contests. That usually motivates and picks up the morale of the girls in our office, and Im assuming the other branches too.

Shannon: If the company were experiencing a time of limited resources, what would be the prime variable or motivating factor that your company would use? How effective would it be? Bonnie: We would use those little contests. There is a lot of competition in the banking industry. We are not only losing out to other banks, but also insurance companies that are promoting their own banking now. You have your financial institutions that are opening your basic checking and savings accounts. Banks do lose businessso we are basically using our friendly customer service. We really try to use those qualities to keep business and bring business in. Thats one of the major things they promote. I dont think I answered your question? Shannon: If you were unable to reward with monetary benefitshow effective would it be, in this company? Bonnie: I dont feel they could motivate people as much without them. In todays day and age, lets face it if a company doesnt do that, but the employee is working well, than I guess it is working for them, because they are afraid to go out and look for another job, because there are not a lot of jobs out there. It doesnt effect me, I still do my 100% and more. I feel that I always do what I should even if there wasnt an incentive program. A lot

of times, like I said, sometimes its overwhelming, I have this contest going onoh my god I have to do this, this and this, on top of this, this, and this I think again it depends on the individual. Shannon: In your opinion, how do employees in your work environment respond to different motivation styles or techniques? Do you think that it is a fair statement to say that because there are a lot more hourly employees in a bank rather than a financial institution where everyone is a loan officer and things like thatdo you think that has a difference on what motivators are more effective? Bonnie: Yes I do. Most of your salaried employees might get a big bonus at the end of the year, probably a lot more than what we have made working all year long in our bonuses or incentives. They have bigger numbers to hit of course, and I guess again, it depends on if its a mortgage person, they have to work off commission, so they do have to work harder than someone who is up in an office making tons of moneybut they have figures to meet too. They have goals to make too. As far as on the branch level, it seems to work here, with our girls, as far as the rewards programs or the flexible schedule. Shannon: Do you think that in this industry, every things relative to this industrythat when someone first comes into the company, it is easier or more effective to reward with those monetary benefits, get them

interested, get them excited about the job, and then you can begin to reward with other incentives? Or could you go the other way around? Bonnie: I think it would be easier in this company to bring them in and eventually introduce the rewards program. Its overwhelming, you have a lot to learn, its not just cash transactions. I know that they are using incentives to hire people, offering extra vacation time. They are using incentives to hire people to make us more competitive. They dontjust because I have been here five years and someone else has been here six months, they are entitled to the same type of incentives I am. Its open to everyone. Any contest they have is open to all banking center levels. Shannon: Do you think that your own experiences with different motivating factors and styles effects your perception of what will be effective for your own employees? Bonnie: Yes it has effected me. Again if you think of the company as a whole, which would be hard this is a rather large company to try to figure out what kind of well Bonnie is this kind of person and she likes this kind of incentive versus Terry she likes this kind of incentive. On a branch level when there are maybe six to ten people, I feel it is important to know what incentive or program or motivational technique is better for each individual. Some people are working for different reasons. I think that you would have to know that motivational technique for each individual. They offer a lot of different incentives. Lisa, another personal banker here who is also a licensed banker, has only been with ABC Bank for a year, she came from another company, she managed to sell five credit cards in one day so they gave her the rest of the day off. They are really fair about

it. The banking industry has become a very sales, competitive organization over the years and it has just happened in the last few yearsfor me. I think that the incentives we offer today are helping us move in that direction as well. They have to take the time. Its harder when you wait on customers everyday because you are in between. You have to do these things to reach your goal, so we do it as a branch because we have goals we have to meet, monthly goals. You cant just be a bank teller any more and do the cash transactions and leave for the day. It is much more involved. Im sure the interviews are a lot more sales oriented. Ive noticed a lot more of the people coming out of college, we have one right now in management training, shes in business and marketing courses that Im sure are helping her. * The name of the banking institution this interviewee represents has been changed for the sake of confidentiality to ABC Bank.

APPENDIX F INTERVIEWEE: TRACY RECENDIZ, OFFICE MANAGER COMPANY: *ABC BANK DATE: MARCH 19, 2005 TIME: 9:30AM LOCATION: ABC BANK NORTHVILLE, MI INTERVIEWER: SHANNON RILEY Shannon: Please give me a brief description of the company and what product or service it offers to the consumer. Tracy: Within the bank industry now, we offer everything to the consumer. We try to actually be, typically they say were a one stop shop. You can get everything at one location. You can get, besides all of your checking and your saving products, you can get your CDs, you can get your retirement products, as well here, your mortgage. We now also offer securities, so now you can come in and we can even help you will all of your investments. We can help you plan for your retirement, and all of your loan needs. Every single loan need that you have, the bank can do that for you. Some of the newest ones that all of the banks have jumped on board with as we move into more of a sales industry is offering securities, where we will help you do all of your investments as well. So that all of your funds are in one spot and we can help you keep track of them and make sure that you have enough in each category. We can sell everything within one branch. Shannon: First I would like to know a little bit about the work environment, as far as the physical setting, and the general background and work experience of your employees. Tracy: Within each branch you will haveyou have your CRSs that work behind the teller lines, that are taking the deposits, doing withdrawals. CRSs, we call them our customer service representativeswhat was known as a teller. They are the ones that are our front line. They see most of the customers all the time, so they are the ones taking in the deposits,

helping them with their withdrawals. They are also checking each customers accounts to make sure they are in the proper account or if there is something else that we could assist them with. From the CRSs then you come to our personal bankers. They are the ones that open up the accounts. They sit down and they also talk with the customers to make sure we are getting them into the proper account by asking them questions in what it is that they are needing. We are also looking for possibilities to help them in other areas as well that they may not know. We have found out that a lot of customers dont know that banks do everything, so they end up going all these different directions. So we let them know that we

can help them with everything and develop a personal relationship with them and get to know them better. We also have my position, Im an office manager. I oversee internally everything that goes on within the office. I try to assist, coach, and train, make sure all of the paperwork is filed in compliance, make sure legally we are doing everything properly. Then we also have another manager, that is more of the sales manager. She is out developing a lot of business relationships. In house we also try to keep a mortgage representative, who will also have an office. We will also have a securities officer that will also have an office. Some of our other offices house commercial loan officers as well, ours does not. We have about 8 people working in this office. We are very fortunate. A lot of us here have worked together for quite a long time. A lot of my staff tends to follow me wherever I may end up. They seem to enjoy working with me. Im of the philosophy that I wont ask them to do something that I dont do myself. My management style is that I will pitch in and help wherever I can. They always know that I am there for a backup. Ill run a window, Ill assist with a line. I will handle any complaint or customer problem that comes along. They know that Im there for them. I will open up accounts. I will do whatever is needed, therefore that has really gained a lot of respect from my staff and so far a lot of them have followed me from branch to branch. This branch was opened in June. We were downtown in Northville, and quite a few of us were there. Ive had others though that have come from others branches that have worked with me and come here. We are actually very friendly with each otherits kind of like a family. We know everything there is about each other. So it makes the working relationship really nice. Ive never come across any problem, but we are really careful not to step over that line. Just because they feel like I know them, they are not going to ask for something that is way out of line. Weve established those boundaries that we are not going to infringe upon each others' friendship to get something, but at the same time we have developed a very relaxed working style where I can just go to them and say we need to get this accomplished. I dont have to put very much into it, and they know that this is what needs to be done. So its a very easygoing atmosphere. Shannon: What do you feel best motivates the employees? Tracy: You actually need to get to know each individual, different things will

motivate different people. The way that the bank works is that there are so many different motivation levels. Of course it is very sales orientedso one of the first levels is especially for the CRS, the customer service rep/ tellers, is anytime that they notice an opportunity, that there is a better product, or something else that we could assist the customer in, and that customer opens up that particular product, they get paid for that. They get paid for that referral. That was a good customer relationship, they took

advantage of it, they saw it, they talked to the customer and got the customer to come over to open up the product. Same with the staff, stuff that is not normally sold, or that customers dont normally come in forlike a credit card or something like that, my personal bankers will get paid if the customer decides to take that credit card, or take a certain loanmy staff will get paid for that. So thats one level of mo tivation. Then we also have competitions within our region, and say that the branch does very well on a certain set of goals that has been established, like a two week goal, or a month goalwell then the branch itself will get an incentive and it could be going outlike all of us being taken out for dinner and then we spend a whole evening together on the fun side. Then we also hold different motivation factors within the branch. I try to come up with monthly ones. This month it had to do with credit cards and whoever got five approved credit cards or ten applications would receive a half a day off with pay and then as the added incentive, say you actually got five approved, and it is 10:00am you get to wave goodbye. You get to leave because you have done your sales job and this is your higher motivation. We do stuff like that. We also do things where whoever gets a home equity loan will get to select a gift, and we might have a bunch of gifts all wrapped up and they wont know whats in them. We are also doing another one for investments and it looks like a race track and its back in our break room. I set up this race track and each one of my staff has a horse with their special name on it and every time they get, not just a referral, but the customer actually sits down and talks with representative, then they start moving around that race track. Its called Run for the Roses. At the end of that they will receive a dinner and a bouquet of roses. So its just a little different things, and plus we post little different things like that so that staff can see how theyre doing and they love recognition. Then we can go up and say great jobyouve moved six leaps down and kind of announce it. The other really big motivation factor is not necessarily money or gifts, they just want the recognition. They just want everybody to know that they are doing a good job and that youre proud of them. So I will walk up periodically and say you know that was a fantastic thought and you had such great customer service, and I just wanted to let you know that the customer is pleased with you and so am I. Well they are beaming for the rest of the day, and you wont believe the kind of customer service you get out of them for the rest of the day. It made their day; it brightened it upand thats all it took. They were in a bad mood and you just got them in a great mood and they are

ready to work for the day. Other things that well do, is sometimes we will sit down with them and we will say, what will motivate you? You give us your listis it a free breakfast, is it money, do you want your day offdo you want me to buy you a magazine? They will list out different things of what they want. We are always gearing things all different months. Like I said, the half a day off really appealed to one and she jumped in there an got four applications one day and her fifth applications

came in at 9 oclock the next morning and she waived good-bye and got a day off basically. Thats what she wanted and she said, Im outta here. We said congratulations. Its different motivations for different people, but you really have to get to know them and you play up on that. A lot of times we do things all the same like the Run for the Roses just because thats a team thing, but then there are other times were we will single out individual motivation to get to each person and get them going and let them know that we recognize their hard work. Shannon: Do you think that employees distinguish between financial and nonfinancial motivators? Which motivators cause employees to respond more productively? Tracy: Yes, absolutely. Ive been with the bank, well Ive been in the financial industry for 17 years, or 18 years I should say. Ive been with this company for 14. Ive worked with many people in many different environments. Not only at a regular branch, I have worked at a main office branch, where you have everything else going on around you as well. Ive also worked in a bankmart, so that you are inside a Farmer Jack and its just the four of you and you are in a very confined little area. So Ive learned that everybody has a different motivation. Some people really dont care about the money, they are actually getting paid to do their job and thats how they feel, but they want to be recognized. They want to be told that they are doing a great job and it might be something as simple as doing a little certificate saying we are awarding this to you because you have done outstanding customer service. Youve really gone beyond. We do that also within the bank. You will be amazed that when they get that certificate and maybe a little pin that shows outstanding customer service that have gone up and beyond the call of dutythey just beam. Sometimes we will do it within the branch and sometimes we will hold it within the region. So that specific individual gets this award in front of everybody within the entire region. Thats what motivates them. Other people are in it purely for the moneythe more money you pay me, the better Ill do. Thats why we have both motivations as a bank wide. Thats why we have both motivations going. You can choose what will motivate youyou can choose. Shannon: The next part of the question states which motivators cause employees to respond more productively? It sounds like you would have to cater to that employees needs. Tracy: Ive actually seen both. One person is strictly in it for money and the more incentive you offer them the better they will perform and push for

that particular product or set of products. And then the other onethe just want to be recognized, because maybe in their eyes, they are wanting to move up in the company and the more recognition that they get is what is

going to get them higher in the company and so that is the direction that they go. Shannon: If the company were experiencing a time of limited resources, what would be the prime variable or motivating factor that your company would use? How effective would it be? Tracy: Well obviously they would probably end up going for those non-financial motivators. It might even bethey just might put more twists on it to make sure that they are very recognized. It might even be that the president himself comes out to see you. Which ours doesweve actually had our president come out and shake everyones hand and just let us know that they have see what the branch has done and they are very impressed. So they will do different spins on that. They will show that they will go above and that there is nobody too good to be able to count. Weve had regional managers, district managers, and weve had the president himselfif thats what it takeshe will come and personally give you an award. Shannon: In your opinion, how do employees in your work environment respond to different motivation styles or techniques? Tracy: Mine kind ofright nowall of my staff, believe it or not, sort of responds equally, because we give them both. They get paid, they get little gifts, and they also get the recognition. It will even be that we will write about them so that it goes into our region's newsletter, so that everybody gets to know what they did. So our staff pretty well beams. Shannon: Since you give both rewards, both incentives, can you tell with each employee which one theyre striving for? Tracy: You know its funny because, I will look and say that well Sarah, money or being paid for something is not that big of a deal for her. I mean shell except it, she loves the extra income, you know what Im saying? For her, she tends more to the recognition. Terry needs more of the funds just because of her situation, but believe it or not, she is the very one that if you come out and give her a verbal recognition, you see her beam for the rest of the day. So, my staff, and these two I think they like more of the money right nowso I think that is what they are going forthat extra. I think, of course, it also depends on their jobs. I think thats why we try to praise even more on the CRS level because they always feel like they are the bottom of the barrel. We are always trying to show them actually they are not. They are the front line person, if they fail we all fail. So we are very dependent on them at times. I think that they just like to be told, that we know what their job is and we appreciate them and give them that acknowledgement. Thats what it takes. I think that in the long runI

think that acknowledgement takes over money. I just do. I think that people like to be told that they are doing a good job and that they are seen.

I really do. So far everybody that I really talk to, when it comes down to it. I mean they love the gifts, and they love the money, but I actually see their face light up a whole lot more when you just verbally come up to them and tell them they have done a great job and you thank them for it. Thats to meI see them respond to that more. Dont get me wrong though, if you offer someone $50.00 they are going to take $50.00. However when you actually watch them the rest of the dayif I paid someone, walked up to them and said here is your $50.00 and just walked away, the rest of the day wouldnt change. If I walked up to somebody and said wow you just knocked my socks off with what you just did and there are very few people that have accomplished what you have accomplishedand from the bottom of my heart I thank you for it, they are beaming for the rest of the day and the have actually got that extra step in their step. You knowyou can hear it when they are talking to the next customer. You have made their day. Thats what I have noticed. Shannon: Do you think that your own experiences with different motivating factors and styles effects your perception of what will be effective for your own employees? Tracy: Sure it does, because what you likewhen I started in the business, I also likedsometimes its a thankless job and you are dealing with money and you get a lot of customer problems. Your day doesnt go by when you are sometimes dealing with a customer that can come in very irate and some days you can feel like you are getting slapped down faster than you can stand up. You are sitting in one little spot, and its all customer service. In this day and age, people come in and they are not always in the best of moodseven if there is nothing wrong, they come in very grouchy. Our employees have to approach each and every customer with a smile on their face. Sometimes you dont feel like smiling, but they have to do it, and they know they have to do it. I remember those days, because fortunately I was one of those that has also worked every single position. I think that that helps me out in my management because I have been in every single position that I now manage. I can remember that it just feels good for somebody to come by and just thank you. Thats why I tend to try and motivate both, a gift is really nothing unless there is a thank you attached to it. If you have a manager that is taking all of the glory for themselves and has never shared it with the staff, that stays with you forever and it makes you go I do not want to be one of them. Ive actually known some of those and I still see some of those, they still exist. You walk into their branch and everybody is very somber, they are just doing their job, no communication. Weve actually had customers come in here and say it is so fun to come in here to bank because we are always laughing and all

helping each other, every one is joking, and you know us. When we get those comments from our customers, thats what we want to keep. Thats why I do the management style that I do. Plus this gets me where I work with every single one of my staff. I stand right by their side on any given

day and it works. I think thats the most important thing, and my staff has always said that they really like it, that I work right with them. I never ask them to do something that I wont do myself. I will also always take on the extra work. If they feel that they are overwhelmed, they know that they can say that they cant get to it. I will take on that extra work and help them that day, but they know that I still appreciate the work. I always tell my staff, you know, Im so glad that you are here today, you are going to make my job so much easier, just by showing up. Thats all it takes. One of the rewards right now is that they went out to get a free breakfast, thats where one of them is right now, picking everything up. Its a Saturday, its not so bad coming in.

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