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Chapter 11 Employee Motivation

Learning Objectives

• Understand the importance of strategic motivation.

• Discuss the features of the major theories of motivation.
• Explain the effectiveness of money as a motivator.
• Describe the relationship between motivation and performance.
• Understand the implications of motivation theory for HRM.

Chapter outline
Chapter 11 focuses on the importance of motivation in relation to work and performance. The first three
sections in the chapter are devoted to discussing the importance of motivation and its relationship to strategy
and management. The different theories of motivation are then presented in the next five sections and the
role of money in employee motivation is considered in the final section.

Strategy and motivation

Increasing cost pressures, downsizing and the advent of the lean organisation have focused management
attention on the strategic importance of employee motivation. Strategic business objectives seeking
competitive advantage through higher productivity and improved customer service can be achieved only if
employees are strongly motivated to perform. Job design, the system of rewards, management style,
corporate culture, organisation structure and change management all impinge on employee motivation.

Importance of motivation
Employee motivation is one of the most challenging aspects of HRM. It manifests itself through employee
morale, output, absenteeism, effort, labour turnover, loyalty and achievement.

Motivation is generally defined as an internal state that induces an employee to engage in particular
behaviours, or a set of factors that cause employees to behave in certain ways, but it is extremely complex.
This is because employee motivation is the product of many interacting factors such as the culture of the
organisation, management’s leadership style, the structure of the organisation, job design and HR policies
and practices. The employee’s personality, skills, knowledge, abilities and attitudes also play a part.

Management and motivation

What really motivates employees? What force drives employees to perform well? Ability and skill determine
whether an employee can do the job, but motivation determines whether the employee will do the job
properly. Motivation is not the singular key to increased performance. Many other factors influence
individual performance in an organisation. No amount of employee effort can compensate for factors such as
lack of ability or skill, outdated equipment, inefficient systems, poor organisational structure or financial
constraints.

Early theories of motivation

Scientific management
Traditional explanations of employee motivation are based on the work of Frederick Taylor and others in the
scientific management school. Division of labour, task specialisation, time measurement and the use of
monetary rewards are at the heart of this management approach to motivation. The key assumption is that
money is the primary employee motivator, that human beings have the rational characteristics of a robot.

Human relations movement

Recognised that employees seek more than financial rewards from their jobs. Money was regarded as an
effective motivator only when it was used to facilitate and not oppose the satisfaction of employee needs. It
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should be noted that the human relations movement did not challenge the scientific management school’s
emphasis on division of labour, task specialisation or management control. Rather, it added a social
dimension to management’s orientation.

Theory X and Theory Y

All managers have their favourite theories about what motivates employees. In reality, these are not always
stated or even recognised. They often operate as hidden policies. McGregor argued that some of these are
remarkably pervasive and influence every managerial decision or action. He concluded that managers
develop their views on employee motivation based on one of two propositions — what he called Theory X
and Theory Y.

Managers guided by Theory X assumptions are directive, narrow and control oriented in their treatment of
employees. Passive, dependent and reluctant subordinates are the result. Managers following a Theory Y
orientation, in contrast, will delegate authority, encourage employee participation in decision making, and
grant greater job autonomy and task variety. Highly productive employees with initiative and commitment to
the organisational goals are created when these higher order needs are satisfied.

Content theories of motivation

Content theories attempt to explain motivation in terms of factors that initiate employee behaviour. They are
called content theories because they define what is motivating the person. Thus, content theories give the
manager an insight into employee needs and how these affect employee behaviour and attitudes at work.

Maslow’s needs hierarchy theory

This is one of the most popular motivation theories among practising managers. It argues that employees are
motivated to satisfy five basic types of needs (physiological, safety, social, esteem and self-actualisation).
According to Maslow, these are arranged in a hierarchy of importance, with lower order needs requiring
adequate satisfaction before the next higher order need can motivate behaviour.

Herzberg’s two factor theory

Sometimes called the motivation–hygiene theory, the two-factor theory has gained wide acceptance in
management circles and has had a major impact on job design. It defines a two-tier hierarchy of needs.

• Motivators - higher order needs for achievement (recognition, intrinsic interest in the work,
responsibility and advancement). These determine job satisfaction and performance.

• Hygiene - lower order needs that are met by pay, working conditions, interpersonal relations,
supervision, company policy and administration. Herzberg argued that these factors do not motivate
themselves but can prevent motivation from occurring.

Job characteristics theory

The job characteristics theory is a more sophisticated development in relating the nature of the job to
performance. The argument is that employees are motivated by the intrinsic nature of the job. According to
job characteristics theory, five core characteristics of a job (skill variety, task identity, task significance,
autonomy and feedback) significantly affect the levels of employee motivation and satisfaction.

McClelland’s achievement motivation theory

McClelland’s theory argues that certain personality variables explain why some employees achieve and
others do not. Achievement motivation is seen as the desire to perform in terms of a standard of excellence,
or a desire to be successful in competitive situations. The achievement motivation of each employee depends
on childhood, personal and work experiences, and on the type of organisation in which he or she works.
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Limitations of content theories

The theories of Maslow, Herzberg and McClelland seek to identify what motivates employee behaviour.
They concentrate on particular employee needs and their satisfaction. Thus, content theories give managers
an understanding of work-related factors that initiate motivation. However, managers should not accept them
as the only explanations of employee motivation. Content theories serve a useful purpose in focusing a
manager’s attention on employee needs and their satisfaction, but they are limited by their inability to
explain the underlying dynamics of motivation. They give only a restricted understanding of why employees
choose certain behaviours to satisfy their needs. In contrast, this choice factor is the central focus of process
theories of how motivation works.

Process theories of motivation

Vroom’s expectancy theory
Expectancy theory argues that an employee’s choice of behaviour depends on the likelihood that his or her
actions will bring about a specific result which is attractive to him or her. To better understand this process,
Vroom suggests that managers know the following three factors:

1. expectancy (effort–performance link) — the employee’s perceived probability that exerting a given
amount of effort will lead to performance.

2. instrumentality (performance–reward link) — the degree to which the employee believes that
performing at a specific level will bring about a desired result. Instrumentality also varies from zero
to one.

3. valence (attractiveness) — the value or importance that the employee places on the potential result
or reward that can be achieved. Valences can be either positive or negative and range on a scale from
minus one (very undesirable) to plus one (very desirable).

Vroom claims that the relationship between motivation (M), expectancy (E), instrumentality (I) and valence
(V) can be expressed as follows: M = E x I x V.

Equity theory
Employees want to be treated fairly. Equity theory states that if an employee sees a discrepancy between the
outcomes he or she receives and his or her inputs, compared with those of other employees, that employee
will be motivated to do more (or less) work. He or she may question working harder than others, for
example, if given a merit increase or recognition that is lower than that given to other employees. Perceived
inequity produces tension within the individual and this motivates him or her to eliminate or reduce the
tension by striving to make the balance equal.

Goal setting theory

When an employee does not perform as a manager expects, it is often because the employee does not really
know what is expected. An employee may think that she or he is performing well, then be shocked to
discover that the performance is not what the manager wants. For goal setting theory to work:

• Managers must set clear and specific goals.

• Employees must accept the goals as their own.
• Goals must be difficult but not impossible to achieve.
• Managers must give the employee frequent feedback on performance

Reinforcement theory
Learning by reinforcement (sometimes called operant conditioning or behaviour modification) is not strictly
a theory of motivation. It focuses on rewards and punishments and the effect they have on behaviour.
Reinforcement theory is based on a fundamental principle of learning — the law of effect — whereby
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‘behaviour that results in a pleasant outcome is likely to be repeated; behaviour that results in an unpleasant
outcome is not likely to be repeated’.

Organisational behaviour modification

Organisational behaviour modification is a means of applying operant conditioning techniques in the
workplace. It aims for the ‘systematic reinforcement of desirable organisational behaviour and the non-
reinforcement or punishment of unwanted organisational behaviour’, so its use has generated considerable
controversy.

Approaches   to   organisational   behaviour   modification   include   Positive   reinforcement.   Negative  

reinforcement. Punishment. Extinction. 

Money and motivation

Money plays a complex role in employee motivation. It is not the sole motivator but it does motivate, and
some researchers argue it is the most important single motivator used in organisations. Equity, expectancy
and reinforcement theories all show the value of money as a motivator. It is instrumental in satisfying
employee needs because it facilitates the purchase of food, shelter and clothing and provides the means to
pursue leisure activities. Money can also serve as a symbol of achievement, recognition and status. It acts as
a message from the organsation to employees on how much it values their contribution.

Pay and motivation

Pay will motivate employees only if certain conditions are met.

• Employees must attach a high positive valence to pay.

• Employees must believe that good performance leads to high pay.
• Employees must believe that the quality of their job performance primarily reflects how hard they
are trying.
• Employees must see the positive outcomes tied to good performance as being greater than the
negative ones
• Employees must see good performance as the most desirable of all possible behaviours.
• Employees must perceive a performance related pay increase as being significant.

Summary
Motivation theories give the HR manager an insight into the importance of:
• identifying and understanding employee needs
• examining the range of employee behavioural choices and their respective attractiveness
• clarifying goals and performance expectations
• ensuring that rewards are closely tied to performance
• ensuring that rewards satisfy needs that are important to employees
• ensuring that employees perceive rewards as equitable.
The theories offer the HR manager a framework for systematically analysing a whole range of HRM
activities. They also provide considerable insight into why employees behave and perform the way they do.
Such insights increase the effectiveness of the HR manager in helping managers to successfully motivate
their employees to achieve the organisation’s strategic business objectives.

Terms to identify
achievement motivation job dissatisfaction process theories
content theories job enrichment punishment
continuous reinforcement job satisfaction reinforcement
expectancy motivation scientific management
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extinction motivators self-actualisation

fixed interval schedule
fixed ratio schedule
human relations movement
hygiene factors
instrumentality
job characteristics theory
needs hierarchy Theory X
negative reinforcement Theory Y
operant conditioning valence
partial reinforcement variable interval schedule
positive reinforcement variable ratio schedule

REVIEW QUESTIONS
Questions in bold print are recommended as exam questions

1. What is motivation? What is its impact on employee behaviour and performance?

One of the most challenging aspects of human resource management is employee motivation. It manifests
itself through employee morale, output, absenteeism, effort, labour turnover, loyalty and achievement.
Motivation is not understood by managers and its essence remains enigmatic. It is what makes the "high
fliers" fly. It is why some employees demonstrate a burning desire to achieve, and accept increased
responsibility, while others remain passive or openly hostile.

What is it that really motivates employees? Human resource managers have been struggling with this
question for decades. However, it is a mistake for human resource managers to regard motivation simply as
a problem of "how to get employees to work harder". Motivation (or lack of it) can be seen in absenteeism,
labour turnover, punctuality, quality and safety.

Factors that Australians say would motivate them to improve their work performance are:
• More recognition of good work
• More information about what is going on
• More opportunities to develop skills, abilities, creativity
• More money
• More interesting work

Similarly, it is wrong for human resource managers to assume that motivation is the singular key to
increased performance. Many other factors influence individual performance in an organisation. No
amount of employee effort can compensate for factors such as lack of ability or skill, outdated equipment,
poor organisational structure or financial constraints.

Finally, it is important that human resource managers distinguish between motivation and job satisfaction.
Motivation is the "why" of behaviour. Job satisfaction reflects an employee's feelings about various aspects
of work. Managers have to get their employees to act in a specific, goal-directed way so that the
organisation's objectives can be met. If this is done so that employees get what they want from the job, then
job satisfaction is achieved. Satisfaction is thus an end state resulting from the attainment of some goal.

The employee's attitude towards work and life in general, and his or her age, health, level of aspiration,
social status and political and social activities all influence the level of job satisfaction. Managers have
traditionally believed that a satisfied employee is a motivated employee. Happy employees are not
necessarily productive. Job satisfaction does not automatically cause employees to work harder. In fact, the
weight of evidence suggests that job performance leads to job satisfaction rather than the other way round.
However, satisfaction is related to tenure, turnover, absenteeism and tardiness. The encouragement of
positive feelings in the employee about work can have a direct impact on human resource costs and
organisational effectiveness in achieving objectives.
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2. Which theory of motivation has the most practical value for managers seeking to improve
employee performance? Why?

This question gives students the opportunity to compare and contrast the various ways of looking at
motivation. They should differentiate between the content and process theories at the very minimum, when
attempting to determine relative value.

The theories of Maslow, Herzberg and McClelland seek to identify what it is that motivates employee
behaviour. They concentrate on particular employee needs and their satisfaction. Content theories thus give
managers an understanding of work-related factors that initiate motivation. However, managers should not
accept them as the only explanations of employee motivation. Content theories serve a useful purpose in
focusing a manager's attention on employee needs and their satisfaction, but they are limited by their
inability to explain the underlying dynamics of motivation. They provide managers with only a limited
understanding of what behaviour employees will choose in order to satisfy their needs. This choice factor is
the central focus of process theories in their attempt to describe how motivation works.

Expectancy theory is best for explaining situations where an employee is given a specific task to perform.
Equity theory is best where management wants to explain motivation across a range of people at a work
centre or workplace.

3. What are the key motivators used in an organisation with which you are familiar? Are they effective?
Explain your answer.

This is a discussion question and gives students the chance to apply the theory to situations they are familiar
with. There is also the opportunity here to apply a questionnaire to a workplace.

4. How do people in general and employees in particular attempt to satisfy their social and esteem
needs?

Social - friendly co-workers; friendly supervisor; social and sporting activities

Esteem - impressive job title; high status job; praise and recognition from supervisor and co-workers; high
performance rating; large merit increase; performance bonus

5. What is the difference between content and process theories of motivation? Which approach do
you think has the greater relevance for the HR manager? Explain your answer.

The content theories of Maslow, Herzberg and McClelland seek to identify what it is that motivates
employee behaviour. They concentrate on particular employee needs and their satisfaction. Content
theories thus give managers an understanding of work-related factors that initiate motivation. However,
managers should not accept them as the only explanations of employee motivation. Content theories serve a
useful purpose in focusing a manager's attention on employee needs and their satisfaction, but they are
limited by their inability to explain the underlying dynamics of motivation. They provide managers with
only a limited understanding of what behaviour employees will choose in order to satisfy their needs. This
choice factor is the central focus of process theories in their attempt to describe how motivation works.

Both types of theories are relevant for the HR manager. The text illustrates how each theory is translated
into management action. This is how relevance for the HR manager is demonstrated.

6. A manager is confronted with an employee performance problem. As a HRM practitioner,

which questions would you ask in attempting to find a solution?
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The first question is "Does the employee have the skills and competencies to perform better at the job?". If
the answer is "Yes", the next question is "Does the organisation provide adequate support to allow the
employee to perform the job?". If the answer is "Yes" to this question as well, then the HR manager can
conclude that the employee has a motivation problem. It is wrong for human resource managers to assume
that motivation is the singular key to increased performance. Many other factors influence individual
performance in an organisation. No amount of employee effort can compensate for factors such as lack of
ability or skill, outdated equipment, poor organisational structure or financial constraints.

Having determined that it is, in fact, a motivation problem, the human resource manager might need to
clarify the nature of the motivational shortfall. The HR manager, in conjunction with the line manager,
might try to determine the needs that the employee has; the rewards that the employee values; the
employee's perceptions of the equity of his or her reward structure; the motivational potential of the
employee's job; the degree to which the working environment is reinforcing desired or unwanted behaviour;
the employee's expectation that work behaviour will result in desired outcomes.

7. Identify a job in which you were highly motivated or demotivated. What characteristics of the work,
the people and/or the organisation made you feel this way?

Feeling positively or feeling negatively about work can equate roughly with job satisfaction. Students need
to understand the distinction between job satisfaction and motivation. A supplementary question can be to
ask the students what it was about work that made them "do that little bit extra". This would give a close
determination of motivation.

It important for the facilitator to translate the students' answers into the theory behind motivation. Their
answers need to be explained in terms of the theory. The students should attempt to do this. The facilitator
should assist and clarify.

8. Have you ever had a really bad boss? Describe what made your boss so awful. Which of your needs
were not satisfied by your boss’s behaviour? What can someone do if they have a bad boss?

This is a personal and interpretive question to test your experiences of having a range of human needs not
met at work.

9. Do you agree that using motivation theories in the workplace is nothing more than employee
manipulation by management? Explain your answer.

Such an argument can mainly apply to the "motivational" technique of organisational behaviour
modification (OBM). Students should distinguish between the definition of manipulation that has negative
connotations, and is allied to unfair exploitation; and the other definition which means management of
employee behaviour. Managers should manage employee behaviour, they probably should not exploit it
unfairly.

OBM is a means of applying operant conditioning techniques in the work place. Because it aims at the
"systematic reinforcement of desirable organisational behaviour and the non reinforcement or punishment of
unwanted organisational behaviour" and claims by some of its proponents that individuals can be controlled
and shaped while at the same time feeling free the use of OBM has generated considerable controversy.
Westwood, for example, expresses concerns regarding infringement of human rights, violation of the dignity
of the individual and the reduction of the employee to the level of a laboratory rat subject to the
manipulations of a manager playing 'God'. While others regard such techniques as nothing more than a
cynical attempt by management to destroy the workers sense of collective solidarity along with the influence
and power of unions in the work place. For these critics, the creation of employee commitment by use of
rewards is "manufactured consent" aimed at control to ensure that employees work for management's
interests and not their own.
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Although such criticisms should not be dismissed, they overestimate the effectiveness of OBM. While
reinforcement is a useful management tool it should not be assumed that human behaviour is so simple to
understand and modify. Researchers, for example, have used the same experiments that OBM advocates use
to support their position and explained the results in terms of goals, inequities or expectancies.

Employees (and unions) are not so gullible as to be deceived by such cynical manipulation. In any
organisation (public, private and trade union) much employee behaviour is already subject to reinforcement.
Employees have their pay docked for being late or for an unauthorised absence; get a salary increase or
promotion for good performance and so on. It is inevitable that managers influence the behaviour of their
employees. By definition, management is the art of getting things done through people. If the manager is to
do his job well, he must be successful in influencing his employees. In short, behaviour control is an
unavoidable part of every manager's job. It should not be forgotten that employees also manage up by
rewarding managers through being on time, praise etc. or by punishing them by forcing the boss to do the
work, complaining to the boss's boss etc. The real question according to Schermerhorn "may not be whether
it is ethical to control behaviour, but whether it is ethical NOT to control behaviour well enough that the
goals of both the organisation and the individual are served". Nevertheless, HRM managers should not
ignore the ethical questions involved in OBM.

10. Think of a job you have done. How could it have been enriched?

This is a subjective question which attempts to apply the job enrichment principles to one’s real-life
experience.

DIAGNOSTIC MODEL

1. Identify and discuss the key influences from the diagnostic model (figure 1.11) that have significance
for employee motivation.

Social and demographic issues are the most important influences on employee motivation. These issues
pertain to management as much as to the employees. Scientific management, the Human Relations
movement, Theory X and Theory Y, the Process theories of motivation all reflect an insight into the
psychology of people; and they all reflect in some way the social attitudes of the day. The employee's
attitude towards work and life in general, and his or her age, health, level of aspiration, social status and
political and social activities all influence the level of job satisfaction and motivation. Managers have
traditionally believed that a satisfied employee is a motivated employee. Happy employees are not
necessarily productive.

2. Explain the impact of employee motivation on the acquisition, development, reward, maintenance
and departure of an organisation’s human resources.

Employee motivation reduces the need for further employee acquisition. Development probably enhances
employee motivation. It is difficult to see the reverse relationship being present. Rewards can be
motivators. Motivation is a reward in itself. Motivation is an important element of maintenance.
Motivation to stay and work will naturally reduce the necessity for departure from the organisation.

3. Discuss the impact that employee motivation may have on commitment, competence, cost
effectiveness, congruence, adaptability, performance, job satisfaction and employee motivation.

Students should think through the issue that the HRM outcomes of competence, congruence, adaptability
and performance will lead to motivation; rather than the other way around. Certainly, a person will be
committed, cost effective, and highly performing if they are motivated, but they will also be motivated if
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they are competent, congruent with their job, and are performing well. Motivation manifests itself through
employee morale, output, absenteeism, effort, labour turnover, loyalty and achievement.

It is wrong for human resource managers to assume that motivation is the singular key to increased
performance. Many other factors influence individual performance in an organisation. No amount of
employee effort can compensate for factors such as lack of ability or skill, outdated equipment, poor
organisational structure or financial constraints.

It is also important that human resource managers distinguish between motivation and job satisfaction.
Motivation is the "why" of behaviour. Job satisfaction reflects an employee's feelings about various aspects
of work. Managers have to get their employees to act in a specific, goal-directed way so that the
organisation's objectives can be met. If this is done so that employees get what they want from the job, then
job satisfaction is achieved. Satisfaction is thus an end state resulting from the attainment of some goal.

The employee's attitude towards work and life in general, and his or her age, health, level of aspiration,
social status and political and social activities all influence the level of job satisfaction. Managers have
traditionally believed that a satisfied employee is a motivated employee. Happy employees are not
necessarily productive. Job satisfaction does not automatically cause employees to work harder. In fact, the
weight of evidence suggests that job performance leads to job satisfaction rather than the other way round.
However, satisfaction is related to tenure, turnover, absenteeism and tardiness. The encouragement of
positive feelings in the employee about work can have a direct impact on human resource costs and
organisational effectiveness in achieving objectives.

Soapbox
There are seldom clear answers to these questions. The idea is to stimulate debate as much as to determine
an answer.

Ethical dilemma

The present

1. If you were Joe Scott, what would you do? Explain your answer, referring to one of the motivation
theories to justify your decision.

This depends upon the needs and the cognitive processes which drive his behaviour. If Joe Scott has strong
need for money, or if money is of value to him, or if he is short of money at the moment, then he will be
motivated to take the temptation of the bribe. Obviously, the construction manager has picked him as a
person who is strongly motivated by money at the moment.

2. What ethical issues, if any, are raised in this case?

This is a case of bribery, so obviously there are ethical issues at stake. the first is about offering

Case study

What’s fair

1. Do you agree with the views expressed above? Explain your answer.

over to you. However, one point to note is that the number of years you have put in, or the degree you
possess, do not determine you income. Income is a function of how replaceable you are. It is also a
function of the success you have in controlling the market for your capabilities.
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2. Why do you think Clack, Lim and Elgin are complaining about their compensation? What
motivation theory do you think best explains their feelings?

They perceive that their inputs to work are not matched by their rewards from it. They perceive an inequity.