PART TWO – MOTIVATION AND REWARD SYSTEM

INTRODUCTION

Reward system is an important tool that management can use to channel employee
motivation in desired ways. In other words, reward systems seek to attract people to join the
organization to keep them coming to work, and motivate them to perform to high levels. The
reward system consists of all organization components – including people processes rules and
decision-making activities involved in the allocate of compensation and benefits to employees in
exchange for their contribution to the organization.

LEARNING OUTCOMES: After successful completion of this unit, you should be able to:

1. Exhibit an understanding of the nature, methods, applications, and general principles

governing Organizational Behavior;

2. Demonstrate knowledge in applying the general principles governing Organizational

Behavior, from the fundamental concepts to the complex dynamics of organizations;

3. Relate the principles of Organizational Behavior to real-life situations;

4. Explain the rationale of applying the principles and concepts of Organizational Behavior
in relation to real-life situations;

5. Evaluate the effectiveness of applying the principles and concepts of Organizational

Behavior.

COURSE MATERIALS:

LESSON 4 – MOTIVATION

What Is Motivation?

Motivation is the process that initiates, guides, and maintains goal-oriented behaviors. It
is what causes you to act, whether it is getting a glass of water to reduce thirst or reading a
book to gain knowledge.

Motivation involves the biological, emotional, social, and cognitive forces that activate
behavior. In everyday usage, the term "motivation" is frequently used to describe why a person
does something. It is the driving force behind human actions.

Work Motivation

 It is the result of a set of internal and external forces that cause an employee to choose
an appropriate course of action and engage in certain behaviors.

Three elements of work motivation:

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  Direction and focus of the behavior
 Level of the effort
 Persistence of the behavior

David McClelland’s Motivational Drives

McClelland’s theory of needs is one such theory that explains this process of
motivation by breaking down what and how needs are and how they have to be approached.
David McClelland was an American Psychologist who developed his theory of needs or
Achievement Theory of Motivation which revolves around three important aspects, namely,
Achievement, Power, And Affiliation.

This theory was developed in the 1960s and McClelland points out that regardless of our
age, sex, race, or culture, all of us possess one of these needs and are driven by it. This theory
is also known as the Acquired Needs as McClelland put forth that the specific needs of an
individual are acquired and shaped over time through the experiences he has had in life.

Psychologist David McClelland advocated the Need theory, also popular as Three Needs
Theory. This motivational theory states that the needs for achievement, power,
and affiliation significantly influence the behavior of an individual, which is useful to understand
from a managerial context.

 Achievement Motivation is a drive some people have to pursue and attain challenging
goals.
 Affiliation Motivation is a drive to relate to people on a social basis
 Power Motivation is a drive to influence people, take control, and change situations.

Human Needs

Types of Needs

 Primary Needs- basic physical needs

 Secondary Needs- social and psychological needs
 Maslow’s Hierarchy of Needs

Abraham Maslow’s Hierarchy of Needs

Maslow's hierarchy of needs is a motivational theory in psychology comprising a five-tier

model of human needs, often depicted as hierarchical levels within a pyramid.

From the bottom of the hierarchy upwards, the needs are: physiological (food and clothing),
safety (job security), love and belonging needs (friendship), esteem, and self-actualization.

Lower-Order Needs. First-level needs involve basic survival and include physiological
needs. The second level that tends to dominate is bodily safety and economic security.

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 Higher-Order Needs. Third level in the hierarchy concerns love, belonging, and social
involvement at work. The needs at the fourth level encompass those for esteem and status,
including one’s feelings of self-worth and of competence. The fifth-level need is self-
actualization.

Herzberg’s Two-Factor Model

 Herzberg’s Motivation Theory model, or Two Factor Theory, argues that there are two
factors that an organization can adjust to influence motivation in the workplace.

These factors are:

 Maintenance factors are not strongly motivating however, absence of these factors is
strongly dissatisfying.
 Motivational factors. Absence of these factors are not dissatisfying but their presence
are strongly motivating.

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Alderfer’s E-R-G Model

Clayton Paul Alderfer is an American psychologist who developed Maslow’s hierarchy of

needs into a theory of his own. Alderfer’s ERG theory suggests that there are three groups of
core needs: existence (E), relatedness (R), and growth (G)—hence the acronym ERG. These
groups align with Maslow’s levels of physiological needs, social needs, and self-actualization
needs, respectively.

 Existence needs concern our basic material requirements for living. These include what
Maslow categorized as physiological needs (such as air, food, water, and shelter) and
safety-related needs (such as health, secure employment, and property).
 Relatedness needs have to do with the importance of maintaining interpersonal
relationships. These needs are based in social interactions with others and align with
Maslow’s levels of love/belonging-related needs (such as friendship, family, and sexual
intimacy) and esteem-related needs (gaining the respect of others).
 Finally, growth needs describe our intrinsic desire for personal development. These
needs align with the other portion of Maslow’s esteem-related needs (self-esteem, self-
confidence, and achievement) and self-actualization needs (such as morality, creativity,
problem-solving, and discovery).

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 ERG Model

Organizational Behavior Modification Theory

What is Organizational Behavior Modification Theory?

 The Organizational behavior modification theory or the Reinforcement theory deals with
changing behavior through rewards or punishments that are essentially contingent on
performance. It is primarily based on the following two principles.

1. A behavior that leads to a positive consequence (reward) tends to be repeated, while a

behavior that leads to a negative consequence (punishment) tends not to be repeated.
2. Managers can influence and change an employee’s behavior through properly
scheduled rewards or punishment.

 It is the application of in organizations of the principles of behavior modification.

 Law of Effect- states that a person tends to repeat behavior that is accompanied by
favorable consequences (reinforcement) and tends not to repeat behavior that is
accompanied by unfavorable (or lack of) consequences.
 Social Learning or Vicarious Learning- learning by observing the actions of others.

Alternative Consequences

 Positive Reinforcement provides a favorable consequence that encourages repetition of

a behavior.
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  Shaping is a systematic and progressive application of positive reinforcement.
 Negative Reinforcement occurs when a behavior is accompanied by removal of an
unfavorable consequence.
 Punishment is the administration of an unfavorable consequence that discourages a
certain behavior.
 Extinction is the withholding of significant positive consequences that were previously
provided for a desirable behavior.

Goal Setting Theory

 In 1960’s, Edwin Locke put forward the Goal-setting theory of motivation. This theory

states that goal setting is essentially linked to task performance. It states that specific
and challenging goals along with appropriate feedback contribute to higher and better
task performance.
 In simple words, goals indicate and give direction to an employee about what needs to
be done and how much efforts are required to be put in.

The important features of goal-setting theory are as follows:

 The willingness to work towards attainment of goal is main source of job motivation.
Clear, particular and difficult goals are greater motivating factors than easy, general and
vague goals.
 Specific and clear goals lead to greater output and better performance. Unambiguous,
measurable and clear goals accompanied by a deadline for completion avoids
misunderstanding.
 Goals should be realistic and challenging. This gives an individual a feeling of pride and
triumph when he attains them, and sets him up for attainment of next goal. The more
challenging the goal, the greater is the reward generally and the more is the passion for
achieving it.
 Better and appropriate feedback of results directs the employee behaviour and
contributes to higher performance than absence of feedback. Feedback is a means of
gaining reputation, making clarifications and regulating goal difficulties. It helps
employees to work with more involvement and leads to greater job satisfaction.
 Employees’ participation in goal is not always desirable.
 Participation of setting goal, however, makes goal more acceptable and leads to more
involvement.

Goal setting theory has certain eventualities such as:

a. Self-efficiency- Self-efficiency is the individual’s self-confidence and faith that he has

potential of performing the task. Higher the level of self-efficiency, greater will be the
efforts put in by the individual when they face challenging tasks. While, lower the level of
self-efficiency, less will be the efforts put in by the individual or he might even quit while
meeting challenges.

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 b. Goal commitment- Goal setting theory assumes that the individual is committed to the
goal and will not leave the goal. The goal commitment is dependent on the following
factors:
o Goals are made open, known and broadcasted.
o Goals should be set-self by individual rather than designated.
o Individual’s set goals should be consistent with the organizational goals
and vision.

The Expectancy Model

 Developed by Victor H. Vroom, he explains that motivation is a product of three factors:

one’s estimate of the probability that effort will result in successful performance
(expectancy), one’s estimate that the performance will result in receiving the reward
(instrumentality) and how much one wants a reward (valence).

The Equity Model

 J. Stacy Adams’s equity theory states that employees tend to judge fairness by
comparing the outcomes (rewards) they receive with their relevant inputs (contributions)
and also by comparing this ratio (not always the absolute level of rewards) with the ratios
of other people.

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SUPPLEMENTAL READINGS/REFERENCES:

 Cherry, K. (2020, April 27). What is Motivation? Very Well Mind.

 https://www.verywellmind.com/what-is-motivation-2795378

 Ditan, Carol D. 2016. Understanding and Managing Organizational Behavior. Anvil

Publishing, Inc.

 Bauer, T. & Berrin, E. 2012. An Introduction to Organizational Behavior. Creative

Commons by-nc-sa 3.0 (http://creativecommons.org/licenses/by-nc-sa/
 3.0/) license.

 Lumen Learning. (n.d.). Alderfer’s ERG Theory.

https://courses.lumenlearning.com/wm-introductiontobusiness/chapter/alderfers-
erg-theory/

 Management Study Guide. (n.d.). Goal Setting Theory of Motivation.

https://www.managementstudyguide.com/goal-setting-theory-motivation.htm

 Management Study HQ. (n.d.). McClelland’s Theory of Needs.

Human Behavior in Organizations/ Compiled by: Minera Laiza C. Acosta 8

 https://www.managementstudyhq.com/mcclellands-theory-of-needs-power-
achievement-and-affiliation.html

 MBA Skool. (2012, May 16). Organizational Behavior Modification.

https://www.mbaskool.com/business-concepts/human-resources-hr-terms/2386-
organizational-behavior-modification-theory.html

 McLeod, S. (2020, December 29). Maslow’s Hierarchy of Needs. Simply Psychology.

https://www.simplypsychology.org/maslow.html

 Newstrom, John W. 2011. Organizational Behavior: Human Behavior at Work 13th

Edition. Boston, McGraw-Hill

ACTIVITIES/ASSESSMENTS:

Group Work:

1. In your role as a student, do you feel you are motivated more by Maslow’s lower-order or
higher-order needs? Explain. Describe how you expect motivation to change once you
graduate.
2. Explain the differences between negative reinforcement and punishment.

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