Chapter 16

Motivating
Employees

Presentation

Notes
Group 6
Group Members
• Khurram Raheel Akbar
• Yasir Mehmood
• Hammad Naeem
 • Noor Alam Khan
• Wajahat

PPT slides of this chapter is also available 0346-9405559

MOTIVATING EMPLOYEES

The process by which persons' efforts are energized, directed and sustained
towards attaining goals.

Motivating and rewarding employees is one of the most important, and one of the
challenging activity that managers do. Effective managers who want their
employees are motivated and to tailor their motivational practices to satisfy the
needs and wants of those employees.
Generally speaking: Motivation involves many efforts exerted towards a goal.
Key elements are important to this definition (energy, direction and persistence).

a) The energy: is a measure of intensity, that how motivated employee puts

more effort and work hard.
• Quality of the effort also lies under intensity.
• High levels of efforts are unless without proper direction that helps
organization in achieving its goals.

b. A direction: that guides organization and its employees towards achieving

its motives in the best ways (Best utilization of resources with minimum waste,
which leads to high level of productivity).
c. persistence Dimension: prolong and sustain forth efforts to achieve those
goals.
Motivating high level of employee is an important organizational concern and
managers keep looking for answers. For instance, a recent Gallup poll found that
large majority of US employees –some 73%-are not engaged with their work. As the
researchers stated, “These employees are essentially checked out. They are sleep
walking through their work day, putting time, but not energy or passion into
their work”
It is no wonder then that both practicing managers and academic researchers want to
understand and explain employee motivation.

Motivation Process

– “the willingness to exert high levels of effort to reach

organizational
goals, conditioned by the effort’s ability to satisfy some individual needs.
• effort - a measure of intensity or drive
• goals - effort should be directed toward, and consistent
with, organizational goals
• needs - motivation is a need-satisfying process

Conclusion:
Motivation is a important as energy or passion in professional work of
employees, so it is better to passionate, guide and prolong motivation instead of
sleepwalking through their working and putting time of the employees in their jobs.
In this chapter we are going to first look at early motivation theories and then
several contemporary theories. We will finish by looking at some current motivation
issues and some practical suggestion, manager can use in motivating employees.

Early theories of Motivation

We are being with three early theories of motivation, that, although questionable in
term of validity, are probably the most widely known approaches to employee
motivation These theories are HERBERG'S two factor theory, MCGREGOR'S
theories X and Y, and MASLOW'S theory of needs.
Although more valid explanations of motivation have been developed, you should
know these early theories because of following two reasons.
 1. They represent the foundation from which contemporary motivation
theories were developed
2. Practicing managers continue to use these theories to explain
employee motivation.

1. MASLOW'S HIERARCHY OF NEEDS THEORY

The first motivation theory we are going to look at address employee motivation.
The best known theory of motivation is probably ABRHAM MASLOW'S
HIERARCHY OF NEEDS THEORY. Maslow was a psychologist who proposed
that with every person is a hierarchy of five needs.

 physiological Needs: A person's needs for food, drink shelter,

physical satisfactions (Marriage, physical etc)
 Safety Needs: A person's needs for Security and protection from
physical and emotional harm, as well as assurance that physical need will
continue to be met.
 Social Needs: A person's needs for affection (love), belongingness
(relationship), acceptance (social needs) and friendship.
 Esteem needs: A persons' needs for internal factors like self
respect, autonomy (Freedom) and achievements (set goals). And external
esteemed factors such as, status, recognition, and attention.
 Self actualization needs: A persons' needs to become what he or she
is capable of becoming (potential and self-sufficient)

Maslow's Hierarchy of needs.

HOW DOES MASLOW'S HIERARCHY OF NEEDS THEORY EXPLAIN
MOTIVATION
The theory proposed the followings
1. No need is ever fully satisfied.
2. substantially satisfied needs no longer motivates and
individual to satisfy that needs therefore, if you want to motivate some one,
you need to understand what need level that person is hierarchy and focus
on satisfying needs at or above that level.
CONCLUSION
Managers who used MASLOW'S HIERARCHY OF NEEDS THEORY in
motivating employees attempting to change their organization and management
practices, so that employees need could be satisfied. In addition Maslow separated
the five needs into higher and lower levels
– LOWER-ORDER NEEDS - largely satisfied external needs like:
 physiological - food, drink, shelter, sexual satisfaction
 safety - security and protection from physical and emotional
harm
Assurance that physiological needs will be satisfied
– HIGHER-ORDER NEEDS - largely satisfied internal needs like:
 social - affection, belongingness, acceptance
 esteem - internal factors like self-respect, autonomy external
factors like status, recognition, attention
 self-actualization - achieving one’s potential each level in
hierarchy must be satisfied before the next is activated
Once a need is substantially satisfied it no longer motivates behavior theory received
wide recognition
Maslows' need theory received with recognition during 1960s and 70s. The reasons
were that it is logical and easy to comprehend.

2. MC GREGOR'S TEORY X AND THEORY Y

Douglas McGregor best known for proposing two rests of assumptions about human
needs. Theory X and Theory Y. very simply “
Theory X: is a negative view of people that assumes workers have little ambition
dislike work, want avoid responsibility, they are lazy, and need to be closely
controlled to work effectively.
 Theory X is a negative view of people.
 assumed that lower-order needs dominated

Theory Y:
Theory Y is a positive view that assumes that workers can exercise self-
direction, accept and actually seek out responsibility, and consider work to be a
natural activity, assumed that higher-order needs dominated, no evidence that either
set of assumptions is valid

McGregor's Analysis about Motivation.

The answer is best expressed in the frame work presented by Maslow. Theory X
assumed that lower-order needs dominated indirect while in theory Y assumption
that higher older needs dominated.
According to him Theory Y was more valid than those of Theory X. So
employee's responsibility and accepting motivation.

3. HERZBERG'S TWO FACTOR THEORY

Frederick Herzberg’s two factor theory (also called motivation hygiene theory)
proposes that intrinsic factors are related to job satisfaction and motivation whereas
extrinsic factors are associated with job dissatisfaction.
Herzberg believe that individual attitude towards work determine
success or failure. He ask people for detail descriptions of situations in which they
felt exceptionally good or bad about their jobs. These finding are shown in given
table
Certain characteristics were related to job satisfaction (Factors on the left side of the
table), and other to job dissatisfaction (Factors on the right side of the table) the
extrinsic factors that create job dissatisfaction were called hygiene factors. When
these factors are adequate, people won’t dissatisfy, but they won’t be satisfied
(motivated) either. To motivate people on their jobs, Herzberg suggested
emphasizing motivators, the intrinsic factors that increase jobs satisfaction. Certain
factors were related to job satisfaction, therefore intrinsic termed as
“MOTIVATOR" while on the other hand job dissatisfaction factors were extrinsic
called as HYGIENE factors.

Motivators
Motivators are those factors that increase job satisfaction and motivation.
Hygiene Factors
While hygiene factors are those which eliminate job dissatisfaction but
do not motivate.
Contemporary theories of motivation
The theories and approaches we’re going to look at in this section
represent current explanations of employee motivation. Although these theories may
not be as well known as those we just discussed, they are supported by research.
What are these contemporary motivation approaches? We’re going to look at six:
three needs theory, goal-setting theory, reinforcement theory, designing motivating
jobs, equity theory, and expectancy theory. These theories are evaluated after
research and are listed as under.
 Three need theory
 Goal-Setting theory
 Reinforcement theory
 Designing motivating jobs
 Equity theory
 Expectancy theory

1. Three Need Theory

“The motivation theory that says three acquired (not innate) needs which
are achievement, power, and affiliation, are major motives in work.”
 David McClelland and others have proposed the three-need theory. "The
motivation theory that says there acquired (not innate (achievement, power,
affiliation)) needs are major motives in work."
These three needs include the following.
a) Need for achievement (nAch)
b) Need for Power (nPow)
c) Need for affiliation (nAff)

a) Need for achievement (nAch)

It is most researched theory which states that "The derive to excel to
achieve in relation to set of standards, and to strive to succeed"
This means that people have a desire to do something better or more
efficiency than it was done before.
b) Need For Power (nPow)
it has not been researched as extensively as (nAch). The theory states "The need to
make others behave in a way that they would not behave otherwise".
Any way it is closely related to managerial success. The best managers
tend to be high in the (nPow).

c) Need for Affiliation (nAff)

It has not been also reached extensively but as (nPow) it states "the desire for
friendly and close interpersonal relationship."
It is also closely related to managerial success and the best managers tend
to be low in (nAff)
People with a high need for achievement are striving for personal achievement rather
than for the trappings and rewards for success. They have a desire to do something
better or more efficiently than it’s been before. They prefer jobs that offer personal
responsibility for finding solutions to problems, in which they can receive rapid and
unambiguous feedback on their performance to tell whether they are improving, and
in which they can set moderately challenging goals. They are motivated by and prefer
the challenge at working at a problem and accepting personal responsibility for
success or failure. Also a high need to achieve doesn’t necessarily lead to being a
good manager. The reason high achievers don’t necessarily make good managers is
probably because high achievers focus on their own accomplishments while good
managers emphasize helping others accomplish their goals.
The other two needs, however, we do know that the needs for affiliation and
power are closely related to managerial success. The best managers tend to be high in
.the need for power and low in the need for affiliation
How do you determine your levels of these needs? All three are typically
measured using a projective test (known as the Thematic Apperception Test or TAT),
in which respondents react to a set of pictures. Trained interpreters then determine the
individual’s levels of nAch, nPow, and nAff from the stories written.

2) Goal Setting Theory

The position that specific goals increase performance and those difficult goals, when
accepted, result in higher performance than do easy goals.
There is substantial research support for goal-setting theory, which says that specific
goals increase performance and that difficult goals, when accepted, results in higher
performance than do easy goals. What does goal-setting theory tell us?
First, intention to work toward a goal is a major source of job motivation.
Studies on goal setting have demonstrated that specific and challenging goals are
superior motivating forces. Specific hard goals produce a higher level of output than
does the generalized goals of “do your best”. Specificity of the goal itself acts as an
internal stimulus.
It is a contradiction that goal-setting theory says that motivation is maximized
by difficult goals, whereas achievement motivation by moderately challenging goals?
First, goal setting theory deals with people in general. Given that no more than 10 to
20 percent of North Americans are high achievers. Second, conclusion of goal-setting
theory applies to those who accept and are committed to the goals. Difficult goals will
lead to higher performance only if they are accepted.
We know that people will do better if they get feedback on how well they’re
progressing toward their goals because feedback helps identify discrepancies between
what they have done and what they want to do; that is, feedback acts to guide
behavior. But all feedback isn’t equally effective. Self-generated feedback, where the
employee is able to monitor his or her own progress, has shown to be amore powerful
motivator than externally generated feedback.
We just assume that difficult and specific goals always lead to higher
performance? In addition to feedback, three other factors have been found to
influence the goals-performance relationship. These are:
1. Goal commitment:
Goal-Setting theory presupposes that an individual is committed to the goal
that is, is determined not to decrease or abandon the goal. Commitment is more likely
to occur when goals are made public, when the individual has an internal locus of
control, and when the goals are self-set rather then assigned.
2. Adequate self-efficacy:
Self-efficacy refers to an individual’s belief that he or she is capable of
performing the task. The higher your self-efficacy, the more confidence you have in
your ability to succeed in a task. So, in difficult situations, we find that people with
low self-efficacy are likely to reduce their effort or give up altogether, whereas those
with high self-efficacy will try harder to master the challenge.
3. National culture:
 Goal-setting theory is culture bound. It’s well adapted to countries like the
United States and Canada because its main idea aligns responsibility well with North
American cultures.

3. Reinforcement Theory
In contrast to goal-setting theory, reinforcement theory says that behavior is a
function of its consequences. Although goal-setting theory proposes that an
individual’s purposes direct his or her behavior, reinforcement theory argues that
behavior is externally caused. What controls behavior are reinforcers; that is,
consequences immediately following a behavior that increase the probability that the
behavior will be repeated.
Reinforcement theory ignores factors such as goals, expectations, and needs.
Instead, it focuses solely on what happens to a person when he or she does something.
Chapter 14 showed how managers use reinforcers to shape behavior. But the
concept of reinforcement is also widely believed to explain motivation. People will
most likely engage in desired behaviors if they are rewarded for doing so. These
rewards are most effective if they immediately follow a desired behavior; behavior
that isn’t rewarded or is punished, is less likely to be repeated.
Using reinforcement theory, manages can influence employees’ behavior by
using positive reinforcers to reinforce actions they deem desirable.

4. Designing motivating jobs.

Because managers are primarily interested in how to motivate individuals on the job,
we need to look at ways to design motivation jobs. If we look closely at what an
organization is and how it works, we will find that it’s composed of thousands of
tasks. These tasks are, in turn, aggregated into jobs. We use the term job design to
refer to the way tasks are combined to form complete jobs. What are some ways that
managers can design motivating jobs?
Job enlargement:
The horizontal expansion of a job by increasing jobs scope. The number of
different tasks required in a job and the frequency with which these jobs are repeated.
For example, a dental hygienist’s job could be enlarged so that in addition to cleaning
teeth, he are she is pulling patients files, refilling them when finished, and sanitizing
and storing instruments. This type of job design option is called job enlargement.
Job enrichment:
The vertical expansion of a job by adding, planning, and evaluating
responsibilities. Job enrichment increases job depth, which is the degree of control
employees have over there work. In others words, employees are empowered to
assume some of the tasks typically done by there managers. Thus the tasks are an
enriched job allow workers to do complete activity with increased freedom,
independence, and responsibility. These tasks also provide feedback so that
individuals can assess and correct there own performance. For example, in an
enriched job, a dental hygienist, in addition to cleaning teeth could schedule
appointments (planning) and follow up with clients (evaluating).
Job Characteristics Model:
A framework for analyzing and designing jobs that identifies five primary job
characteristics, their interrelationships, and their impacts on outcome.
According to JCM, any job can be described in terms of five core dimensions,
defined as follows.
 Skill Variety, the degree to which a job requires a variety of
activities so that an employee can use a number of different skills and
talents.
 Task Identity, the degree to which a job requires completion
of a whole and identifiable piece of work.
 Task Significance, the degree to which a job has a substantial
impact on the lives or work of other people.
 Autonomy, the degree to which a job provides substantial
freedom, independence, and discretion to the individual in scheduling the
work and determining the procedures to be used in carrying it out.
 Feedback, the degree to which carrying out work activities
required by a job results in the individual’s obtaining direct and clear
information about the effectiveness of his or her performance.

The JCM as shown in the figure notice how the first three dimensions that are skill
variety, task identity and task significance, combined to create meaningful work.
In other words, if these three characteristics exist in a job, we can predict that the
person will view his or her job as being important, valuable, and worthwhile.
Notice, too, that jobs that possesses autonomy gives the job holder a feeling of
personal responsibility for the results and that is a job provides feedback, the
employee will know how effectively he or she is performing.
The JCM suggest that employees are likely to be motivated when they learn
(knowledge of results through feedback) that they personally (experience
 responsibility through autonomy of work) perform well on tasks that they care
about (experienced meaningfulness through skill variety, task identity or task
significance). The more the job is designed around these three dimensions, the
greater the employees motivation, performance and satisfaction and the lower his
or her absenteeism and likelihood of resigning.

 Combine Tasks, managers should put fragmented tasks back

together to form a new, larger module of work (job enlargement) to
increase variety and task identity.
 Create Natural Work Units, managers should design tasks
that form an identifiable and meaningful hold to increase employee
“Ownership” of the work and encourage employees to view there work
as meaningful and important rather than as irrelevant and boring.
 Establish Client Relationship, the client is the external or
internal user of the product or service that the employee works on.
Whenever possible, managers should establish direct relationships
between workers and there clients to increase skill variety, autonomy and
feedback.
 Expand Jobs Vertically, vertical expansion (job enrichment)
gives employees responsibilities and controls that work formerly
reserved for managers. It partially closes the gap between the “Doing”
and “Controlling” aspects of the jobs and increases employee autonomy.

Open Feedback Channels, feedback lets employees know how well they are
performing their jobs and whether their performance is improving, deteriorating, or
remaining constant. Ideally, employees should receive performance feedback directly
they do their jobs rather than from managers on an occasional basis.

5) Equity Theory
The theory that an employee compares his or her jobs input-outcome ratios with that
of relevant others and then corrects any inequity.
The term equity is related to the concept of fairness and equitable treatment
compared with others who behave in similar ways. There’s considerable evidence that
employees compare themselves to together and that inequities influence the degree of
effort that employees exert. See table:

If an employee perceives his ratio to be equitable in comparison to those of

relevant others (referents: the persons, systems, or selves against which individuals
compare themselves to assess equity). In other words, he perceives that his situation is
fare-then justice prevails. However, if the ratio is inequitable, he views himself as
under rewarded or over rewarded. When inequities occur, employees attempt to do
something about it. What will employees do when they perceive an inequity?
Equity theory possess that employees might:
 Distort either there own or others inputs or outcomes.
 Behave in some way to induce others to change their inputs or
outcomes.
 Behave in some way to change there own inputs or outcomes.
 Choose a different comparison person.
 Or quit their job.
A review of the research consistently confirms the equity thesis: employee motivation
is influenced significantly by relative reward as well as by absolute reward. Whenever
employees perceive inequity, they will act to correct the situation. The result might be
lower or higher productivity improved or reduced quality of output, increase
absenteeism, or voluntary resignation.
The choice of reference is related to the information available about the
referent as well as to their perceived relevant. Historically, equity theory focused on:
Distributive Justice:
Perceived fairness of the amount and allocation of reward among individuals.
Procedural Justice:
Perceived fairness of the process used to determine the distribution of the
rewards.

6) Expectancy Theory

The theory that an individual intends to act in a certain way based on the
expectation that the act will be followed by a given outcome and on the attractiveness
of that outcome to the individual. It includes three variables or relationships (see
figure).

 Expectancy or Effort-Performance Linkage is the probability

perceived by the individual that exerting a given amount of effort will
lead to a certain level of performance.
 Instrumentality or Performance-Reward Linkage is the degree
to which the individual believes that performing at a particular level is
instrumental in attaining a desired outcome.
 Valence or Attractiveness of Reward is the importance that the
individual places on the potential outcome or reward that can be
achieved on the job. Valence considers both the goals and needs of the
individual.
The key to expectancy theory is understanding an individual’s goals and linkage
between effort and performance, between performance and reward and finally
between rewards and individual goal satisfaction. It emphasizes payoffs or
rewards. As a result, we have to believe that then rewards in organization are
offering align with what the individual wants. Expectancy theory recognizes that
 there is non universal principle for explaining what motivates individuals and thus
stresses that managers understand why employees view certain outcomes as
attractive or unattractive. After all, we want to reward individuals with those
things they value positively. Also, expectancy theory emphasizes expected
behaviors.

Integrating Contemporary Theories of Motivation

We have presented six contemporary motivation theories. You might be tempted to
view them independently, but doing so would be a mistake. Many of the ideas
underlying the theories are complementary, and you'll better understand how to
motivate people if you see how the theories fit together.

In this model we are going to learn how these theories can be integrated to motivate
our employee.

The model that integrates much of what we know about motivation. Its basic
foundation is the expectancy model. Let's work through this model, starting on the
left.

Let start from left

The individual effort box has an arrow leading into it that from individual goals. It
means that these are individual goals for their achievement individual put their effort.
This is consisting with goal setting theory that assumes that specific goal increase
performance and that difficult goals, when accepted higher performance when
accepted result in higher performance than do easy goals.

1. Goal setting theory.

In goal setting theory it is assumed that specific and challenging goals increase
employee’s performance and output.
So in this model we start from left
 The individual performance box has an arrow that flows into it
from individual goals. (what will be done)
 Individual goal direct behaviour. (how it will be done)

2. Expectancy Theory

The theory that assumes that an individual tends to act in a certain way that is based
on strength of the expectation.

– By following the expectancy theory, there is strong relationship between efforts

and performance, performance and reward, and rewards and satisfaction of
personal goals.
– These relationships also, affect by certain factors

 Individual's ability to perform the job

 Job Design (interesting)
 Objectives performance evaluation system also increases employee
motivation if it is fair.
 The performance reward relationship will be strong if the individual
perceives that the reward is performance based rather than seniority,
favoritism or some other biased criterion.

The final link in expectancy theory is the reward-goal relationship. It means the when
there is proper rewards the employees will be motivated well and again there will be
good individual goals.

3. Dominant Need

Need theories come into play at this point. When the individual receives rewards for
his high performance if satisfied his dominant needs will consistent with his
individual goals.

A clear look at the model also shows that it consider Maslow's hierarchy of needs
theories, Equity theories and JCM.

4. Need Theory

In need theory it is assumed that nAch, nAf, and nPow are major motives in work.
The high achiever is not motivated by organizational assessment of his or her
performance or organizational rewards. They jump from efforts to individual goals for
those with a high nAch.

5. Reinforcement Theory.

Individual performance is reinforcing by organizational rewards.

6. Equity Theory.

The rewards should be equal on the basis of performance. (as per the efforts)

7. when there will be

Exhibit 16.11 Integrating Contemporary Theories of Motivation
Current issues in motivation
Understanding and predicting employee motivation is one of the most popular area in
management research.
In previous chapter Mr. Hammad and Mr. Yasir introduced several contemporary
theories of motivation.
However employee motivation is influenced by significant workplace issues.
What are these issues?

1. Cross Cultural Challenges

In today's business environment managers automatically assume that
motivational programs that work in one geographic area can also work others.
Most current motivation theories are developed in US and are about Americans. In
America there is individualistic society and quality of life is a cultural characteristics.
For example both goal setting and expectancy theories emphasized goals
accomplishment and individual thoughts.
Now come and look at the motivational theories to see if there is any cross-cultural
transferability.
 Uncertainty avoidance of some cultures inverts Maslow’s needs
hierarchy.
Maslow's theory assumes that can be arranged in a hierarchy of importance

In the hierarchy he argues he argues that people need start with physiological level
and then move progressively up in order.
It is also applicable in Pakistan.
It is applicable in American like culture, countries like Japan, mexico where
uncertainty avoidance characteristics are strong, security needs would be on the top of
the hierarchy.
2. The need for achievement is lacking in other cultures.
Pakistan vs America

3. Collectivist cultural view rewards as "Entitlement" to be distributed based on

individual needs not on individual performance.
M&Cs change their rewards system region to region.
4. Cross Cultural Consistencies
Beside cultural differences there are also some cultural consistencies like interesting
work widely desired in all cultures, as is growth, achievement and responsibility
achievement and responsibility.
The recent example of cultural consistencies is that Maslow's theories are now
applying in Japan.
And Theory X and Y are also applied by Habib Bank Ltd in Pakistan.

• Motivating Unique Group of Workers

It is never easy to motivate employees! Employees come in organization with
different needs, personalities, skills, abilities, interests, and aptitude. They have
different expectations of their employers and different views are what they think their
employer has a right to except of them.
For example
 Some workers get more satisfaction out of their personal interests, they
consider only salary and other monetary reward and not interested in others.
 While some workers get more motivation with high level of efforts.

Given these differences how managers can effectively do motivating jobs in today's
work place.
Managers need to understand motivational requirements of different groups.
These groups are.
 Diverse Workforce
 Professionals
  Contingent workers
 Low skilled, minimum wage employees.
Now let seed each of the group motivators.

1. Motivating Diverse workforce

Today's organizations are diverse human resource and they are diverse in their desires
and needs. Managers use different variable programs, that are.
a. Through Flexibility
 Men desire more autonomy than women
 Women desire learning opportunities, flexible work schedules and
good interpersonal relation.
So there should be diverse array of rewards in order to motivate employees' such
employees.
b. Flexible Work /Job Schedules
By recognizing different employee needs organizations have developed different
flexible work arrangements.
c. Flexitime
A scheduling system in which employees are required to work a certain
number of hours per week, but are free with in limits, to vary the hour of weeks.
d. Job sharing
A practice of two or more people split a full time job.
e. Telecommuting
A job approach where employees work at home and linked to workplace using
computer links.

2. Motivating Professionals
There are professionals in organization. For example software engineers, consultants
etc. They vary from general employees in the term of motivation fro general
employees. It is now becoming issue to motivate professionals.
Professionals have different characteristics that separate them fro other employees.
They
 Have strong and long term commitment to their field of expertise.
  They are loyal to their profession not to the employer.
 Have the need to regularly update their knowledge.
 Don't define work from 8:00 am to 5:00 pm
 Money and promotions are not in their priority.
2. Motivators for professionals
To motivate the professionals managers should
 Give them challenging jobs
 Provide organizational support of their work.
 Update their knowledge regularly.
 Don't ignore money and other rewards as well.

3. Motivating Contingent Workers

Organizations have also part time, on contract workers, called contingent workers.
Contingent workers don't have the security or stability that permanent employees
have, and they don't identify with the organization or display the commitment that
other employees do.
Motivators for contingent workers.
 There should be opportunity to become permanent for contingent
workers.
 Provide them training.
 Equity in compensation and benefits.

4. Motivating Low-skilled minimum wage employees.

 Employee recognition program. (EPR)
 Provision of sincere praise for the right reason.

3. Designing appropriate reward program

Employees reward programs play important role in motivating appropriate employee
behavior. There are different programs used by companies to reward their employees.
i. Open Book Management
Open book management is an approach in which organization's financial statements
are shared with all employees. Some 3500 companies use this approach.
The goal of open book management is get employees to think like an owner by
seeing the impact their decisions and actions have on financial results.
ii. Employee Recognition program
Personal attention and expressing interest, approval, and appropriate for a job well
done.
In a survey of wide variety of employees asked what they considered the most
powerful motivator, majority answer was RECOGNITION and RECOGNITION.

iii. Pay-for-performance
 Variable compensation plans that reward employees on the basis of
their performance:
 Piece rates, wage incentives, profit-sharing, and lump-sum bonuses

iv. Stock option programs

 Using financial instruments (in lieu of monetary compensation)
that give employees the right to purchase shares of company stock at a
set (option) price.
 Options have value if the stock price rises above the option price;
they become worthless if the stock price falls below the option price.

v. Recommendations for Designing Stock Options

From Theory to Practice

Recognize
Match people
individual
to jobs
differences

Don’t ignore
Use goals
money Suggestions
for
Motivating Ensure that
Check the Employees goals
system are perceived
for equity as
attainable

Link rewards
Individualize
to
rewards
performance

Suggestions for Motivating Employees

The following remedial steps can be effective in the theory and practices of
motivating employees.
 Recognize Individual Differences – almost every contemporary theory
recognizes that all employees are not identical.
They have different needs, attitudes, personality etc.
 Match People to Jobs – employees are carefully matched with
the jobs.
i.e High achiever should have jobs that allow them to participate in setting
challenging goals, involve autonomy and feedback
 Use Goals – managers should assure that employees have hard
specific goals and feedback on how well they are doing in achieving
those goals
  Ensure that Goals are perceived as Attainable – actually
goals are attainable, employees who see goals as unattainable will reduce
their effort because they will be thinking “Why bother”.
 Individualize rewards – every employee have different
needs, what act as a reinforcer for one may not for other. So, manager
should use their knowledge of employee differences to individualize the
reward they control such as pay, promotion, autonomy etc.
 Link Rewards to Performance – managers need to make
reward associated with performance.
 Check the System for Equity – employee should perceive
the rewards or outcomes are equal to the inputs. Simply seperated
rewards for each job.
 Use Recognition – recognize the power of recognition. Using
recognition is a low cost means to reward employees.
 Show Care & Concern of Your Employees – employee
perform better for managers who care about them.
 Don’t Ignore Money – Creating interesting jobs and
providing opportunities for participation, remember that money is the
major reason why most people work.

Chapter Summary
What is Motivation?
The process by which a person’s efforts are energized, directed, and sustained toward
attaining a goal.
 Energy – intensity or drive
 Direction – effort channeled in a way that benefits the
organization
 Persistence – sustained effort to achieve goals
What are the Early Theories of Motivation?
• Maslow’s hierarchy of Needs
 Five needs: physiological, safety, social, esteem, & self-
actualization.
  Person moves up hierarchy as needs are substantially satisfied.
 Substantially satisfied need no longer motivates.
• McGregor’s Theory X and Y
 Theory X – assumes people don’t like to work, won’t seek out
responsibility, and have to be threatened & coerced to put forth effort.
 Theory Y – assumes people like to work, seek out
responsibility, and will exercise self-direction.
• Herzberg’s two-factor Theory
 Factors associated with job satisfaction (motivators) were
intrinsic.
 Factors associated with job dissatisfaction (hygiene) were
extrinsic
What are the Contemporary Theories of Motivation?
• Three-Needs Theory – three acquired (not innate) needs.
 Need for achievement,
 Need for affiliation, and
 Need for power.
• Goal-setting Theory – specific goals increases performance and
difficult goals, when accepted, result in higher performance than do easy
goals.
 Intension to work toward a goal is a major source of job
motivation
 Specific hard goals produce higher levels of output than
generalized goals
 Goal setting (difficult goals) versus need for achievement
(moderately challenging goals)
 Participation is probably preferable to assigning goals, but not
always
 Feedback guides and motivates behavior – especially self-
generated feedback
 Contingencies in goal setting: goal commitment, self-generated
feedback
 • Reinforcement Theory – behavior is a function of its consequences
 Use positive reinforcers to reinforce desirable behaviors
 Ignore undesirable behavior rather than punish it
• Designing Motivating Jobs
 Describe the job characteristics, model as a way to design
motivating jobs.
 Job Enlargement – horizontally expanding job scope (variety of
task required in a job)
 Job Enrichment – vertically expanding job depth (degree of
control)
 Jon Characteristic Model – identify 5 primary job dimensions
to motivating jobs (skill variety, task identity, task significance,
autonomy & feedback
• Equity theory - focus on how employees compare there inputs-
outcome ratios to relevant others’ (referents) input-outcome
 Perception of inequality will cause distortion of employees, or
other’s input or outcomes
 Induce others to change there inputs or outcomes
 Change there own input or outcomes
• Expectancy Theory – an individual tends to act in a certain way
based on the expectation that the act will be followed by given outcome and
the attractiveness of that outcomes to the individual.
 Effort-performance linkage
 Performance-Reward linkage
 Attractiveness of Rewards

Current Motivational Issues

 Cross-Cultural Challenges
 Motivating Unique Groups of Workers
• Motivating a Diverse Workforce
• Motivating Professionals
• Motivating Contingent Workers
• Motivating Low-Skilled, Minimum-Wage Employees
 Designing appropriate rewards programs
• Open-Book Management
• Employee Recognition Programs
• Pay-for-performance
• Stock Option Programs

THE END