PHILIPPINE CHRISTIAN UNIVERSITY - DASMARIÑAS

Emilio Aguinaldo Highway Dasmariñas City, Cavite 4114

GRADUATE SCHOOL OF BUSINESS AND MANAGEMENT

ORGANIZATION AND MANAGEMENT

MOTIVATING EMPLOYEES

ANGELA MANALASTAS
REZZELL BARRERA
MARCY SAFLOR
JOMINA SAFLOR

9 MAY 2020
 TABLE OF CONTENTS

1.Motivating Employees

1.1 Importance of Motivation 1

1.1.1 Increasing Employee Motivation 2

1.2 Early Theories of Motivation 4

1.2.1 Maslow’s Hierarchy of Needs 4

1.2.2 Alderfer’s ERG Theory 5
1.2.3 Macgregor’s Theories X and Y 6
1.2.4 Herzberg’s Motivation-Hygiene Theory 9

1.3 Contemporary Theories of Motivation 11

1.3.1 Three-Needs Theory 11

1.3.2 Goal-Setting Theory 12
1.3.3 Reinforcement Theory 13
1.3.4 Job Characteristic Model 15
1.3.5 Equity Theory 17
1.3.6 Expectancy Theory 19

1.4 Current Issues in Motivation 20

1.4.1 Most Important Types of Motivation 26

1.0 Motivating Employees

Motivation is incitement or inducement to act or move. It is the process of inducing the

employees of an organization to act in a predetermined desired manner so as to achieve
organizational goals.

At the core of this concept, lies three important sub-concepts.

 Motive refers to the inner state of mind that initiates and controls behaviour
towards business goals. They directly correspond to the needs of individuals.

 Motivation is the process of stimulating action by understanding the needs of

employee and by utilising their motives.

 Motivator is the technique used for motivation such as pay bonus, promotion
among others.

1.1 Importance of Motivation

The process of motivation plays a very important role in any organization, profit or
non-profit. The managerial process of direction is driven primarily by the process of
motivation as it creates within the mind of an employee the desire to work in the
direction determined by the manager. The following aspects may be considered
under this head:

1. Increases Productivity

Motivation as a process leads to an increase in productivity of the employee.

Motivation meets the needs of the employee and thereby creates the drive to
work at the best of his abilities. A well-employee will be willing to put in
more effort towards the betterment of the organization than another
disheartened employee.

2. Ensures Organizational Efficiency

Motivation plays an important role in changing the attitudes of the

employees in the organization. Indifferent attitude is extinguished most

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 efficiently by motivation. The presence of such favourable attitude allows the
organization to thrive and be successful.

3. Ensures Loyal Workforce

A well-motivated workforce is a loyal workforce. Motivated employees have

high levels of morale and commitment towards the organization and its goals
and objectives. Motivation thus reduces employee turnover and reduces the
need for constant induction of new employees.

4. Ensures a Reactive Workforce

Adapting to changing business environments is an important feature of any

successful business. In order to react to changes easily and to continue
smooth functioning, an organization requires extensive loyalty and
commitment of its employees. This reduces resistance to the changes that the
organization intends to make. This in effect makes the organization efficient
in adapting to changing needs.

5. Facilitates Direction

Direction is an important managerial function and forms one of its core

functions. Motivation as already mentioned is a vital part of direction.
Direction being a process that involves directing or initiating action
according to a plan drawn up requires the employees to work wholeheartedly
with commitment and loyalty. The process of direction is thus possible only
when the employees proceed in the direction that the manager determines and
this requires a motivated workforce.

1.1.1 Increasing Employee Motivation

Here are three immediate actionable tips to increase employee motivation in your
workplace.

1. Improve communication

The easiest way to increase employee motivation is by having positive

communication at the workplace. Not relying only on emails but by making
sure they talk to their employees in person and even on a personal level, if
possible.

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 Try setting aside some time each day to talk with employees or you can join
them during coffee breaks instead of sitting at your desk. By doing so, you
actually make employees feel as though you are part of the team; a leader
instead of just the boss. Experts agree that team communication is super
valuable.

Employees also want to see the company that they are working for succeed.
Many have excellent ideas, ranging from money saving to operational
improvements. Management must make an effort to take some time to ask
and listen to suggestions. Nothing is more worthwhile than feeling valued.

2. Value individual contributions

Management should ensure their employees on how their individual efforts

and contribution plays an important part of the company‘s overall goals and
direction. Employees will take pride and be engaged in their work if they are
aware how their efforts create an impact the organization; regardless of how
big or small their contributions are.

Management does not have to reward their employees with gifts every single
time they did a good job at a task. At times, a simple ―Thank You‖ or ―Great
job‖ will suffice. These meaningful words acknowledge effort, build loyalty
and encourage people to work even harder.

3. Positive workplace environment

Sometimes, the employees lack motivation because their workplace does not
have a positive work environment. To fix this, management could sent out
surveys and get feedback from employees in order to solve the issues that they
may face.

Management could also post a positive quote or picture by the copier, coffee
machine or somewhere else that is visible and that receives high foot traffic so
that others can see. Flora and fauna also helps create a serene workplace
environment for your employees, so why not add a couple of plants around
the office.

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1.2 Early Theories on Motivation

1.2.1 Maslow's Hierarchy of Needs

One of the most popular needs theories is Abraham Maslow's hierarchy of

needs theory. Maslow proposed that motivation is the result of a person's
attempt at fulfilling five basic needs: physiological, safety, social, esteem
and self-actualization. According to Maslow, these needs can create internal
pressures that can influence a person's behavior.

1. Physiological needs are those needs required for human survival such
as air, food, water, shelter, clothing and sleep. As a manager, you can
account for the physiological needs of your employees by providing
comfortable working conditions, reasonable work hours and the
necessary breaks to use the bathroom and eat and/or drink.

2. Safety needs include those needs that provide a person with a sense of
security and well-being. Personal security, financial security, good
health and protection from accidents, harm and their adverse effects are
all included in safety needs. As a manager, you can account for the
safety needs of your employees by providing safe working conditions,
secure compensation (such as a salary) and job security, which is
especially important in a bad economy.

3. Social needs, also called love and belonging, refer to the need to feel a
sense of belonging and acceptance. Social needs are important to
humans so that they do not feel alone, isolated and depressed.
Friendships, family and intimacy all work to fulfill social needs. As a
manager, you can account for the social needs of your employees by
making sure each of your employees know one another, encouraging
cooperative teamwork, being an accessible and kind supervisor and
promoting a good work-life balance.

4. Esteem needs refer to the need for self-esteem and respect, with self-
respect being slightly more important than gaining respect and
admiration from others. As a manager, you can account for the esteem
needs of your employees by offering praise and recognition when the
employee does well, and offering promotions and additional
responsibility to reflect your belief that they are a valued employee.

5. Self-actualization needs describe a person's need to reach his or her full

potential. The need to become what one is capable of is something that
is highly personal. While I might have the need to be a good parent, you
might have the need to hold an executive-level position within your

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 organization. Because this need is individualized, as a manager, you can
account for this need by providing challenging work, inviting employees
to participate in decision-making and giving them flexibility and
autonomy in their jobs.

As the name of the theory indicates, Maslow believed that these needs
exist in a hierarchical order. This progression principle suggests that
lower-level needs must be met before higher-level needs. The deficit
principle claims that once a need is satisfied, it is no longer a motivator
because an individual will take action only to satisfy unmet needs. If you
look at this pyramid you can see how Maslow's needs are organized with
basic physiological needs, such as air, food, water and sleep, at the
bottom and the idea of self-actualization, or when a person reaches the
full potential in life, at the top. Again, according to Maslow, before a
person can take action to satisfy a need at any level on this pyramid the
needs below it must already satisfied.

1.2.2 Alderfer’s ERG Theory

Clayton P. Alderfer's ERG theory from 1969 condenses Maslow's five human
needs into three categories: Existence, Relatedness and Growth.

1. Existence Needs

Include all material and physiological desires (e.g., food, water, air,
clothing, safety, physical love and affection). Maslow's first two levels.

2. Relatedness Needs

Encompass social and external esteem; relationships with significant others

like family, friends, co-workers and employers . This also means to be
recognized and feel secure as part of a group or family. Maslow's third and
fourth levels.

3. Growth Needs

Internal esteem and self-actualization; these impel a person to make

creative or productive effects on himself and the environment (e.g., to
progress toward one's ideal self). Maslow's fourth and fifth levels. This
includes desires to be creative and productive, and to complete meaningful
tasks.

Even though the priority of these needs differ from person to person,
Alberger's ERG theory prioritises in terms of the categories' concreteness.

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 Existence needs are the most concrete, and easiest to verify. Relatedness needs
are less concrete than existence needs, which depend on a relationship between
two or more people. Finally, growth needs are the least concrete in that their
specific objectives depend on the uniqueness of each person.

Relationships between Alderfer's ERG theory concepts

There are three relationships among the different categories in Alderfer's ERG
theory:

1. Satisfaction-progression

Moving up to higher-level needs based on satisfied needs. With Maslow,

satisfaction-progression plays an important part. Individuals move up the need
hierarchy as a result of satisfying lower order needs. In Alderfer's ERG theory,
this isn't necessarily so. The progression upward from relatedness satisfaction
to growth desires does not presume the satisfaction of a person's existence
needs.

2. Frustration-regression

If a higher level need remains unfulfilled, a person may regress to lower level
needs that appear easier to satisfy. Frustration-regression suggests that an
already satisfied need can become active when a higher need cannot be
satisfied. Thus, if a person is continually frustrated in his/her attempts to
satisfy growth, relatedness needs can resurface as key motivators.

3. Satisfaction-strengthening

Iteratively strengthening a current level of satisfied needs. Satisfaction-

strengthening indicates that an already satisfied need can maintain satisfaction
or strengthen lower level needs iteratively when it fails to gratify high-level
needs.

1.2.3 Macgregor’s Theories X and Y

The idea that a manager‘s attitude has an impact on employee motivation was
originally proposed by Douglas McGregor, a management professor at the
Massachusetts Institute of Technology during the 1950s and 1960s. In his 1960
book, The Human Side of Enterprise, McGregor proposed two theories by
which managers perceive and address employee motivation. He referred to
these opposing motivational methods as Theory X and Theory Y management.

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 Each assumes that the manager‘s role is to organize resources, including
people, to best benefit the company. However, beyond this commonality, the
attitudes and assumptions they embody are quite different.

Theory X
According to McGregor, Theory X management assumes the following:

 Work is inherently distasteful to most people, and they will attempt to

avoid work whenever possible.
 Most people are not ambitious, have little desire for responsibility, and
prefer to be directed.
 Most people have little aptitude for creativity in solving organizational
problems.
 Motivation occurs only at the physiological and security levels of
Maslow‘s hierarchy of needs.
 Most people are self-centered. As a result, they must be closely controlled
and often coerced to achieve organizational objectives.
 Most people resist change.
 Most people are gullible and unintelligent.

Essentially, Theory X assumes that the primary source of employee motivation

is monetary, with security as a strong second. Under Theory X, one can take a
hard or soft approach to getting results.

The hard approach to motivation relies on coercion, implicit threats,

micromanagement, and tight controls— essentially an environment of
command and control. The soft approach, however, is to be permissive and
seek harmony in the hopes that, in return, employees will cooperate when
asked. However, neither of these extremes is optimal. The hard approach
results in hostility, purposely low output, and extreme union demands. The
soft approach results in a growing desire for greater reward in exchange for
diminished work output.

It might seem that the optimal approach to human resource management

would lie somewhere between these extremes. However, McGregor asserts
that neither approach is appropriate, since the basic assumptions of Theory X
are incorrect.

Drawing on Maslow‘s hierarchy of needs, McGregor argues that a need, once

satisfied, no longer motivates. The company uses monetary rewards and
benefits to satisfy employees‘ lower-level needs. Once those needs have been

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 satisfied, the motivation disappears. Theory X management hinders the
satisfaction of higher-level needs because it doesn‘t acknowledge that those
needs are relevant in the workplace. As a result, the only way that employees
can attempt to meet higher-level needs at work is to seek more compensation,
so, predictably, they focus on monetary rewards. While money may not be the
most effective way to self-fulfillment, it may be the only way available. People
will use work to satisfy their lower needs and seek to satisfy their higher needs
during their leisure time. However, employees can be most productive when
their work goals align with their higher-level needs.

McGregor makes the point that a command-and-control environment is not

effective because it relies on lower needs for motivation, but in modern society
those needs are mostly satisfied and thus are no longer motivating. In this
situation, one would expect employees to dislike their work, avoid
responsibility, have no interest in organizational goals, resist change, etc.—
creating, in effect, a self-fulfilling prophecy. To McGregor, a steady supply of
motivation seemed more likely to occur under Theory Y management.

Theory Y

The higher-level needs of esteem and self-actualization are ongoing needs that,
for most people, are never completely satisfied. As such, it is these higher-
level needs through which employees can best be motivated.

In strong contrast to Theory X, Theory Y management makes the following

assumptions:

 Work can be as natural as play if the conditions are favorable.

 People will be self-directed and creative to meet their work and
organizational objectives if they are committed to them.
 People will be committed to their quality and productivity objectives if
rewards are in place that address higher needs such as self-fulfillment.
 The capacity for creativity spreads throughout organizations.
 Most people can handle responsibility because creativity and ingenuity
are common in the population.
 Under these conditions, people will seek responsibility.

Under these assumptions, there is an opportunity to align personal goals with

organizational goals by using the employee‘s own need for fulfillment as the
motivator. McGregor stressed that Theory Y management does not imply a
soft approach.

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 McGregor recognized that some people may not have reached the level of
maturity assumed by Theory Y and may initially need tighter controls that can
be relaxed as the employee develops.

If Theory Y holds true, an organization can apply the following principles of

scientific management to improve employee motivation:

 Decentralization and delegation: If firms decentralize control and reduce

the number of levels of management, managers will have more
subordinates and consequently need to delegate some responsibility and
decision making to them.
 Job enlargement: Broadening the scope of an employee‘s job adds variety
and opportunities to satisfy ego needs.
 Participative management: Consulting employees in the decision-making
process taps their creative capacity and provides them with some control
over their work environment.
 Performance appraisals: Having the employee set objectives and
participate in the process of self-evaluation increases engagement and
dedication.

If properly implemented, such an environment can increase and continually fuel

motivation as employees work to satisfy their higher-level personal needs through
their jobs.

1.2.4 Herzberg’s Motivation-Hygiene Theory

Herzberg‘s Theory of Motivation tries to get to the root of motivation in the

workplace. You can leverage this theory to help you get the best performance
from your team. The two factors identified by Herzberg are motivators and
hygiene factors.

1. Motivating Factors
The presence of motivators causes employees to work harder. They are
found within the actual job itself.

2. Hygiene Factors
The absence of hygiene factors will cause employees to work less hard.
Hygiene factors are not present in the actual job itself but surround the
job.

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Motivating factors include:

 Achievement: A job must give an employee a sense of achievement.

This will provide a proud feeling of having done something difficult
but worthwhile.
 Recognition: A job must provide an employee with praise and
recognition of their successes. This recognition should come from both
their superiors and their peers.
 The work itself: The job itself must be interesting, varied, and provide
enough of a challenge to keep employees motivated.
 Responsibility: Employees should ―own‖ their work. They should hold
themselves responsible for this completion and not feel as though they
are being micromanaged.
 Advancement: Promotion opportunities should exist for the employee.
 Growth: The job should give employees the opportunity to learn new
skills. This can happen either on the job or through more formal
training.

Hygiene factors include:

 Company policies: These should be fair and clear to every employee.

They must also be equivalent to those of competitors.
 Supervision: Supervision must be fair and appropriate. The employee
should be given as much autonomy as is reasonable.
 Relationships: There should be no tolerance for bullying or cliques. A
healthy, amiable, and appropriate relationship should exist between
peers, superiors, and subordinates.
 Work conditions: Equipment and the working environment should be
safe, fit for purpose, and hygienic.
 Salary: The pay structure should be fair and reasonable. It should also
be competitive with other organizations in the same industry.
 Status: The organization should maintain the status of all employees
within the organization. Performing meaningful work can provide a
sense of status.
 Security: It is important that employees feel that their job is secure
and they are not under the constant threat of being laid-off.

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 In a general sense, there are four states an organization or team can find
themselves in when it comes to Two Factor Theory.

1. High Hygiene and High Motivation

This is the ideal situation and the one which every manager should
strive for. Here, all employees are motivated and have very few
grievances.

2. High Hygiene and Low Motivation

In this situation, employees have few grievances but they are not highly
motivated. An example of this situation is where pay and working
conditions are competitive but the work isn‘t very interesting.
Employees are simply there to collect their salary.

3. Low Hygiene and High Motivation

In this situation, employees are highly motivated but they have a lot of
grievances. A typical example of this situation is where the work is
exciting and really interesting but the pay and conditions are behind
competitors in the same industry.

4. Low Hygiene and Low Motivation

This is obviously a bad situation for an organization or team to find
itself in. Here, employees aren‘t motivated and the hygiene factors are
not up to scratch.

1.3 Contemporary Theories on Motivation

1.3.1 Three-Needs Theory

McClelland‘s (1961) theory focuses on three needs: achievement, power,

and affiliation. They are defined as follow:

1. Need for achievement (nAch)

Individuals high in. nAch derive satisfaction from reaching goals.

The feeling of successful task accomplishment is important to the
high achiever. High achievers prefer immediate feedback on their
performance and they generally undertake tasks of moderate
difficulty rather than those that are either very easy or very difficult.
They also prefer to work independently so that successful task

Motivating Employees | 11
 performance (or failure) can be related to their own efforts rather
than the efforts of someone else.

2. Need for power (nPow)

The individual exhibiting this need as the dominant one derives

satisfaction from his or her ability to control others. Actual
achievement of desired goals is of secondary importance to the high
nPow individual; instead the means by which goals are achieved
(the exercise of power) are of primary importance. Individuals with
a high nPow derive satisfaction from being in positions of influence
and control. Organizations that foster the power motive tend to
attract individuals with a high need for 'power‘ (for example
military organization).

3. Need for affiliation (nAff)

Individuals exhibiting this need as a dominant motive derive

satisfaction from social and interpersonal activities. There is a need
to form strong interpersonal ties and to "get close" to people
psychologically. If asked to choose between working at a task with
those who are technically competent and those who are their
friends, high nAfft individuals will chose their friends.

Based on this theory, the following assumptions can be made (Robbins, 2003):
 Individuals with a high need to achieve prefer job situations with personal
responsibility, feedback, and an intermediate degree of risk. When these
characteristics are prevalent, high achievers will be strongly motivated.
 A high need to achieve does not necessarily lead to being a good manager,
especially in large organizations. People with a high achievement need are
interested in how well they do personally and not in influencing others to
do well.
 The needs for affiliation and power tend to be closely related to managerial
success. The best managers are high in their need for power and low in
their need for affiliation.

1.3.2 Goal-Setting Theory

Locke and Latham (1990) proposed that challenging goals produce a higher
level of output than do the generalized goals. More difficult the goal, the
higher the level of performance will be. People will do better when they get
feedback on how well they are progressing toward their goals. A goal serves

Motivating Employees | 12
 as a motivator, because, it causes people to compare their present capacity
to perform with that required to succeed at the goal.

There are four contingencies in goal-setting theory:

1. Goal commitment: Goal-setting theory presupposes that an

individual is committed to the goal.

2. Adequate self-efficacy: Self-efficacy refers to an individual‘s

belief that he or she is capable of performing a task. The higher
your self-efficacy, the more 1confidence you have in your ability to
succeed in a task.

3. Task characteristics: Individual goal setting does not work

equally well on all tasks. Goals seem to have a more substantial
effect on performance when tasks are simple, well-learned, and
independent.

4. National culture: Goal-setting theory is culture bound and it is

well adapted to North American cultures.

1.3.3 Reinforcement Theory

Reinforcement theory of motivation was proposed by BF Skinner and his

associates. It states that individual‘s behaviour is a function of its
consequences. It is based on ―law of effect‖, i.e, individual‘s behaviour with
positive consequences tends to be repeated, but individual‘s behaviour with
negative consequences tends not to be repeated.

Reinforcement theory of motivation overlooks the internal state of

individual, i.e., the inner feelings and drives of individuals are ignored by
Skinner. This theory focuses totally on what happens to an individual when
he takes some action. Thus, according to Skinner, the external environment
of the organization must be designed effectively and positively so as to
motivate the employee. This theory is a strong tool for analyzing controlling
mechanism for individual‘s behaviour. However, it does not focus on the
causes of individual‘s behaviour.

The managers use the following methods for controlling the behaviour of the
employees:

Motivating Employees | 13
1. Positive Reinforcement

This implies giving a positive response when an individual shows

positive and required behaviour. For example - Immediately praising
an employee for coming early for job. This will increase probability of
outstanding behaviour occurring again. Reward is a positive reinforce,
but not necessarily. If and only if the employees‘ behaviour improves,
reward can said to be a positive reinforce. Positive reinforcement
stimulates occurrence of behaviour. It must be noted that more
spontaneous is the giving of reward, the greater reinforcement value it
has.

2. Negative Reinforcement

This implies rewarding an employee by removing negative /

undesirable consequences. Both positive and negative reinforcement
can be used for increasing desirable / required behaviour.

3. Punishment

It implies removing positive consequences so as to lower the

probability of repeating undesirable behaviour in future. In other
words, punishment means applying undesirable consequence for
showing undesirable behaviour. For instance - Suspending an
employee for breaking the organizational rules. Punishment can be
equalized by positive reinforcement from alternative source.

4. Extinction

It implies absence of reinforcements. In other words, extinction

implies lowering the probability of undesired behaviour by removing
reward for that kind of behaviour. For instance - if an employee no
longer receives praise and admiration for his good work, he may feel
that his behaviour is generating no fruitful consequence. Extinction
may unintentionally lower desirable behaviour.

Implications of Reinforcement Theory

Reinforcement theory explains in detail how an individual learns

behaviour. Managers who are making attempt to motivate the employees
must ensure that they do not reward all employees simultaneously. They
must tell the employees what they are not doing correct. They must tell the
employees how they can achieve positive reinforcement.

Motivating Employees | 14
1.3.4 Job Characteristic Model

The job characteristics model, designed by Hackman and Oldham, is based

on the idea that the task itself is key to employee motivation. Specifically, a
boring and monotonous job stifles motivation to perform well, whereas a
challenging job enhances motivation. Variety, autonomy and decision
authority are three ways of adding challenge to a job. Job enrichment and
job rotation are the two ways of adding variety and challenge.

It states that there are five core job characteristics (skill variety, task
identity, task significance, autonomy, and feedback) which impact three
critical psychological states (experienced meaningfulness, experienced
responsibility for outcomes, and knowledge of the actual results), in turn
influencing work outcomes (job satisfaction, absenteeism, work motivation,
etc.). The five core job characteristics can be combined to form a motivating
potential score (MPS) for a job, which can be used as an index of how likely
a job is to affect an employee's attitudes and behaviors.

Hackman and Oldham‘s job characteristics theory proposes that high

motivation is related to experiencing three psychological states whilst
working:

1. Meaningfulness of work

That labour has meaning to you, something that you can relate to, and
does not occur just as a set of movements to be repeated. This is
fundamental to intrinsic motivation, i.e. that work is motivating in an
of itself (as opposed to motivating only as a means to an end).

2. Responsibility

That you have been given the opportunity to be a success or failure at

your job because sufficient freedom of action has given you. This
would include the ability to make changes and incorporate the
learning you gain whilst doing the job.

3. Knowledge of outcomes

This is important for two reasons. Firstly to provide the person

knowledge on how successful their work has been, which in turn
enables them to learn from mistakes. The second is to connect them
emotionally to the customer of their outputs, thus giving further
purpose to the work (e.g. I may only work on a production line, but I

Motivating Employees | 15
 know that the food rations I produce are used to help people in disaster
areas, saving many lives).

In turn, each of these critical states are derived from certain characteristics
of the job:

1. Meaningfulness of work

The work must be experienced as meaningful (his/her contribution

significantly affects the overall effectiveness of the organization). This is
derived from:

 Skill variety - Using an appropriate variety of your skills and

talents: too many might be overwhelming, too few, boring.
 Task Identity - Being able to identify with the work at hand as
more whole and complete, and hence enabling more pride to be
taken in the outcome of that work (e.g. if you just add one nut to
one bolt in the same spot every time a washing machine goes past it
is much less motivating than being the person responsible for the
drum attachment and associated work area (even as part of a
group).
 Task Significance - Being able to identify the task as contributing
to something wider, to society or a group over and beyond the self.
For example, the theory suggests that I will be more motivated if I
am contributing to the whole firm‘s bonus this year, looking after
someone or making something that will benefit someone else.
Conversely I will be less motivated if I am only making a faceless
owner wealthier, or am making some pointless item (e.g. corporate
give-away gifts).

2. Responsibility

Responsibility is derived from autonomy, as in the job provides substantial

freedom, independence and discretion to the individual in scheduling the
work and in determining the procedures to be used in carrying it out).

3. Knowledge of outcomes

This comes from feedback. It implies an employee awareness of how

effective he/she is converting his/her effort into performance. This can be
anything from production figures through to customer satisfaction scores.
The point is that the feedback offers information that once you know, you

Motivating Employees | 16
 can use to do things differently if you wish. Feedback can come from other
people or the job itself.

1.3.5 Equity Theory

The equity theory of motivation is the idea that what an individual

receives for their work has a direct effect on their motivation. When
applied to the workplace, it means an individual will generally aim to
create a balance between what they give to the organization compared to
what they get in return.

Understanding the role of equity theory in professional environments can

be helpful when you want to ensure that your team feels properly
motivated and appreciated for their work. When you offer fair
compensation for your team‘s contributions, they may maintain higher
levels of motivation. This can have a positive effect on factors such as
teamwork, job commitment and communication.

Components of the equity theory of motivation

The equity theory contains two primary components: inputs and outcomes.
It is a team member‘s perception of these two factors that can influence
their motivation levels.

 Inputs

An input is a contribution one makes in order to receive a

reward. Different inputs can include time commitments, daily
job responsibilities, loyalty to an organization and enthusiasm
for one‘s work.

An employee will often distinguish between inputs they

consider controllable and not controllable. Examples of
controllable inputs include communication and attendance,
while uncontrollable inputs could be job training and seniority.

 Outcomes

An outcome, or output, is the compensation that an individual

receives as a direct result of the input they provide.

Motivating Employees | 17
 Outcomes can include hard factors such as:

a. Salary and pay raises

b. Job security
c. Benefits like healthcare or vacation time

There are also less tangible outcomes:

a. Praise from co-workers

b. Improved reputation
c. Pride in one‘s work

The value of the outcome should ideally result from the importance placed
on the input. For example, a college graduate may believe that their degree
should return better job opportunities.

Factors that affect equity theory

The theory of equity includes factors known as referents and moderating

variables. These elements can influence an employee‘s perception of what
is fair.

1. Referent groups
Referents are comparisons that an employee can make to form their
evaluation about an outcome they receive. The four primary
comparisons are:

a. Self-inside: Includes the experience an employee had when

they were in a different position in their current organization.
b. Self-outside: Encompasses the employee‘s experience in
other positions outside of the company.
c. Other-inside: Involves a comparison to another employee‘s
inputs and outcomes in the same company.
d. Other-outside: Consists of a comparison to employees in a
similar position outside of the current company.

An employee may use one of these four referents to determine how fairly
their employer treats them. For example, one of your team members may
have come from a company that didn‘t recognize their work. If you
consistently praise that individual when they exceed their goals, they will
likely make a self-outside comparison to conclude that they are currently
receiving fairer outcomes for their work.

Motivating Employees | 18
 2. Moderating variables
Moderating variables such as someone‘s education and experience
level can also have a direct effect on their perception of fairness. For
example, those with higher education levels may have connected
with a larger number of people in their field, which could prompt
them to make other-outside comparisons. Employees who have
more experience in their field or company are more likely to make
internal comparisons, while others with less experience will more
often rely on personal knowledge.

1.3.6 Expectancy Theory

The expectancy theory was proposed by Victor Vroom of Yale School of

Management in 1964. Vroom stresses and focuses on outcomes, and not on
needs unlike Maslow and Herzberg. The theory states that the intensity of
a tendency to perform in a particular manner is dependent on the intensity
of an expectation that the performance will be followed by a definite
outcome and on the appeal of the outcome to the individual.

In explaining the correlation between a persons‘ efforts and performances,

Vroom outlined three core variables in his theory:

1. Expectancy (E)

It‘s a belief that increase in effort leads to increase in performance.

For instance, If you work harder, then you‘ll prepare a great
presentation on Global Warming. Various factors affecting this belief
are:

a. The available resources such as raw materials and time to get the
job done.
b. Having the right skills for the job.
c. Necessary support from supervisors and having correct
information about the job. This leads to belief that the job is in
fact under control.

2. Instrumentality (I)

Instrumentality is a belief that appropriate reward will be received for

right performance. The reward for the first performance also affects
the second level performance. For instance, you will receive ―this‖
reward (say, a car) if you do this job (sell a house) well. This belief is
affected by following factors.

Motivating Employees | 19
 a. Rules of the reward game must be clear. Meaning, there should
be clear understanding about what the reward will be for the
required performance.
b. The individuals performing must have trust in the authority
figures who decide what outcome to be received by which
individual.
c. The process of rewarding for given performance must be
transparent.

3. Valence (V)

Valence is the importance one places on the outcome that is expected.

For instance, if you are already earning $1000 a week, you would only
be motivated by the sum that is higher than that. Again, if the person
values earning money above anything else, he won‘t be intrigued by
the opportunity to get time off.

1.4 Current Issues on Motivation

Keeping employees motivated and engaged can help boost morale, reduce turnover
and create a more dynamic and profitable operation. While different things motivate
different people, there are several demotivating practices that can negatively impact
the business. Recognizing and correcting these issues can help improve the
organization on numerous concerns.
1. Poor Leadership Structure
When no one appears to be in charge, or worse, everyone thinks they're in
charge, it can be hard to perform at peak levels. A lack of hierarchy or direct
reporting structure leads to confusion, resentment and an overall lack of
direction. Employees are demotivated because their objectives are unclear,
and therefore, difficult to work toward. Here are some issues that contribute
to this employee motivation problem:

 Unclear or non-existent job descriptions.

 No clear chain of command.
 Disorganized directives.
 Hazy goals and objectives.

The employee motivation problem can be solved by writing detailed job

descriptions, creating an internal organizational chart and setting clear
organizational goals, both individually and by the department.

Motivating Employees | 20
2. Lack of Challenging Work
Employees who are bored are typically unmotivated. They may not take an
interest in tasks they consider mundane or may perform poorly at the work
they do attempt. Some reasons for this motivational problem include:

 Inappropriate hires.
 Not taking advantage of an employee's skill set.
 Lack of professional development opportunities.
 Failure to promote from within.

This issue can be addressed on several fronts, including the interviewing stage,
when you should strive to ensure the person you hire is a good match for the
job. Once someone is in their position, provide proper training and the tools
the individual needs to do their job effectively. If they appear to master tasks
quickly or don't show an interest, consider cross-training, mentoring, job-
shadowing or even a different position that better utilizes their talents.

3. Workplace Conflict
When employees are at odds with one another, or with management, it's not
only demotivating; it's also unproductive and could lead to a toxic work
environment. The importance of working with people we like cannot be
overstated. Friendships make up for a lot of ills, and the reverse is also true. A
well-paying, career-enhancing job with a group of back-stabbers is a recipe for
stress and misery. A research has shown that ―close work friendships boost
employee satisfaction by 50% and people with a best friend at work are seven
times more likely to engage fully in their work.‖ You don‘t have to have best
friends at work, but you do need to be able to relax around your colleagues and
enjoy their company. Signs of workplace conflict include:

 Bickering and open disagreement.

 Open sabotage of the work product.
 Gossip and clique formation.
 Constant complaints to human resources.

Resolve workplace conflict by setting clear directives about the types of

behavior that will not be tolerated, and taking action accordingly. Address
conflict as it arises and set in place a mediation approach to ensure employees
have the ability to work out their differences in a professional setting.

4. Lack of Confidence in the Company

If employees don't feel the company is "going anywhere," or perceive the
business is mismanaged to the point of potential job loss, this feeling of

Motivating Employees | 21
 insecurity can manifest as poor motivation. Signs of this lack of confidence
may be demonstrated in the following ways:

 Disinterest in long-term projects.

 Unwillingness to cross-train or develop professionally.
 High turnover as people search for new jobs.
 Poor quality of the work product.

This issue can be addressed by sharing corporate objectives with staffers.

Develop a strategic long-term business plan and solicit employee feedback.
Demonstrate how their roles will be augmented with teamwork and growth to
get buy-in about the company's future. If gossip develops about closure,
mergers or other altering factors, communicate sooner rather than later so
staffers feel you are being upfront about the company's future.

5. No One-on-One Attention
Regardless of the company's size, employees need regular feedback to be
motivated to do their jobs properly, and well. Some things that might make a
staffer feel left out in the cold include:

 No regular performance evaluations.

 Irregular one-on-one management meetings.
 Lack of personal goal-setting.
 The absence of regular feedback.

Resolve this potential motivation issue by regularly scheduling brief private

appointments with staffers to touch base on both work and professional
development issues. Hold regular employee performance reviews, annually or
bi-annually, and in these discussions, set specific goals and objectives.

Employee motivation is directly tied to productivity and operational success. If

you are concerned about whether your staffers are motivated, invite them to
share their feelings on the subject via a focus group, employee committee or
survey. You will generate a lot of feedback you can use to your advantage, as
well as reassure employees their input is valued.

6. Micromanagement
Micromanagers may have good intentions – trying to get work done well – but
they drive us crazy. Micromanagement saps the life out of us, causing apathy
at work.

Motivating Employees | 22
 A consistent pattern of micromanagement tells an employee you don‘t trust his
work or his judgment, it is a major factor in triggering disengagement.

Those disengaged employees might stay at their company and muddle through,
or decide to leave for more autonomy. This old adage is true ―people don‘t
quit jobs, they quit managers.‖

7. Conflicting process
As it turns out, money for nothing doesn‘t feel so great. While it might seem
that we work for our salary, studies show we want to feel that our work
matters.

When a company cannot get its act together, or when any change or new idea a
worker tries to implement has to go through endless layers of red tape,
employees lose any motivation or passion that they might have had. People
like enough process to be effective, but not to create busy work.

Organizations should also be mindful of unnecessary rules that don‘t actually

benefit the company. (i.e. restrictive office hours, Internet usage, or vacation
policies) When they start to feel controlling rather than efficient, employees
bristle.

8. Lack of Appropriate Rewards Programmes

Organizations open their account books before their employees, to make them
understand the implications of what they do, how do they do and the impact of
their actions on the bottom-line of the organization. This is called open book
management. Should it be the rule or an exception?

The second issue is devising employee recognition programmes. Yes,

employees need recognition for better work performance. Even the
reinforcement theory calls for rewarding a above par behavior with recognition
immediately. The need for recognition is much greater today.
Due to intense competition for market share, the companies have opted for
fixed pay plus payment related to performance – on the basis of pieces sold,
incentive plans, profit sharing, or lump sum bonus.

This kind of pay system is called as Pay-for-Performance. A recent extension

of pay-for-performance is competency-based compensation. Many companies
have started stock options. These are financial incentives to employees to turn
into owners, so that they work hard to earn more stock options.

Motivating Employees | 23
 9. Job insecurity
When we‘re on a sinking ship, we start preparing for the jump. Employees
who work for unstable companies or in jobs deemed expendable will only
invest enough to keep getting their paycheck while they look elsewhere. The
rest of their energy will be spent sharing rumors with co-workers, updating
their resumes and planning their next move.

As a leader, it‘s extremely difficult to keep the best talent in place during
uncertain times. The best you can do is to communicate frequently, and give
your team a sense of loyalty and trust. You can‘t make people stay, but you
can encourage transparency on both sides so you‘re not surprised.

10. Lack of recourse for poor performance

When we go to work, we like to be rewarded and recognized for our
contributions. If this isn‘t happening, or worse, people doing mediocre work
are getting the same treatment as strong performers, it‘s natural to just turn off
and do your job on autopilot. Companies that don‘t deal with performance
issues bring down the average for everyone.

11. Poor communication

A seasoned journalist said ―Never attribute to conspiracy what incompetence
can explain.‖ In the absence of information, rumors thrive. Employees end up
guessing, confused, and frustrated. If there‘s not an avenue to communicate
back to leadership for clarification, it gets even worse. Having to spend large
amounts of time getting the information we need to do our jobs is exhausting.

Not only does a clear communication throughout the organization make for an
efficient workplace, it has a major impact on employee morale and
confidence.

12. Boredom
Gen Y workers are known for seeking jobs that are personally satisfying and
inspiring to them, but they are not alone. As statistics shows, 55% of Gen X
and Gen Y workers believe that finding a job that is personally fulfilling is
worth sacrifices in salary. A recent poll also shows this increasing desire for
fulfillment among various age groups and geographies. The research found
that those over 65 were the most excited about their work, showing that we all
want to be inspired no matter where we are in our careers.

Motivating Employees | 24
13. Cross-Cultural Challenges
Most of the theories were developed in the USA and were meant for the
Americans. Maslow‘s needs hierarchy aligns with American culture. Countries
which rank high on group dominance, this theory is not applicable. However,
with the mushrooming of BPOs and Shared Services in the Philippines, this
has become an issue.

The managers working in different cultures must understand the local cultures.
Cultures define needs, behavior, and reinforcements. The Indian managers
working abroad or foreign managers working in India must take note of it.

14. Lack of Work-life Balance

Work/life practices are those that help employees juggle their responsibilities
at work with those outside of work. It is now widely accepted that external pre-
occupations can cause stress, absenteeism, resignations, altered work
performance, and reduced motivation. Work-life balance has become a big
issue for the regenerating productive capacity and concern for the quality time
for the family.

In Indian industries and banks, it has been very common for the managers to
sit for longer hours than officially mandated. Don‘t they deserve a better
balancing of work with family life? It is this balancing in view that Indian
companies too have adopted the flexi-timing, telecommuting (especially in IT
sector), job sharing, etc.

15. Lack of motivation strategy to diversified groups of workers

Different employees join an organization with different skills, abilities,
interests, and attitudes; and also, different needs and expectations. This
difference is due to diversity of jobs and diversity of performers, i.e., diversity.

While men need more autonomy; women are more interested in opportunity to
learn and flexi-timings. People want to work for 4 days, but 10 hours a day.
People want to work from homes and telecommuting has made it possible.
Job-sharing (two or more people splitting a full-time job) has also become
popular among those who do not want to work full time.

Professionals have more loyalty to the profession and less to the organization
they are serving to. Professionals get motivated by challenges and the work
itself, because they are already well paid. With regard to contingent workers

Motivating Employees | 25
 (part time, contract, ad hoc, leave vacancy, and temporary workers) they have
no loyalty to the organization.

Those who are yet to establish they are motivated by money; but retirees want
autonomy and status. When such contingent workers work with permanent
employees, who get more pay and perks, they are not likely to give their 100%.

With regard to minimum-wage employees, more money cannot be given,

because company cannot afford.

Managers must understand that people are not motivated by money only. For
such people, pats on the back and giving them due recognition shall be one of
the motivating techniques.

1.4.1 Most Important Types of Motivation

1. Achievement Motivation
It is the drive to pursue and attain goals. An individual with achievement
motivation wishes to achieve objectives and advance up on the ladder of
success. Here, accomplishment is important for its own sake and not for the
rewards that accompany it. It is similar to ‗Kaizen‘ approach of Japanese
Management. This motivation is more important for professionals.

2. Affiliation Motivation
It is a drive to relate to people on a social basis. Persons with affiliation
motivation perform work better when they are complimented for their
favorable attitudes and co-operation. This motivation is of greater use where
money cannot be used to motivate, especially minimum-wage employees and
contingent professionals.

3. Competence Motivation
It is the drive to be good at something, allowing the individual to perform high
quality work. Competence motivated people seek job mastery, take pride in
developing and using their problem-solving skills and strive to be creative
when confronted with obstacles. They learn from their experience. Specialists,
like heart surgeons would feel motivated if they get chances to operate upon
unique cases.

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4. Power Motivation
It is the drive to influence people and change situations. Power motivated
people create an impact on their organization and are willing to take risk to do
so.

5. Attitude Motivation
Attitude motivation is how people think and feel. It is their self- confidence,
their belief in themselves, and their attitude to life. It is how they feel about the
future and how they react to the past.

6. Incentive Motivation
It is where a person or a team reaps a reward from an activity. It is ―you do this
and you get that‖, attitude. It is the type of rewards and prizes that drive people
to work a little harder. Most of the unorganized job workers get motivated
when they are offered more money.

7. Fear Motivation
Fear motivation coercions a person to act against will. It is instantaneous and
gets the job done quickly. It is helpful in the short run. Managers following
Theory x come into this category. In Indian army, this kind of motivation is
very popular.

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