Management functions

Motivation
 What is motivation?

Motivation is willingness
– to do something
– to expend effort to reach a particular goal or
outcome
• Is concerned with satisfying of needs
• An unsatisfied need creates tension that
stimulates drives within the individual.
 What is motivation?
Unsatisfied need

Tension

Drives + search behavior

Goal achievement + satisfaction of

need

Reduction of tension
 Maslow’s Hierarchy of Needs
5 needs:
physiological, security/safety, belonging/social,
esteem, self-actualization

Self-
actualization
Esteem

Social
Safety
Physiological
Vroom’s Expectancy theory
1. E (expectancy): will my efforts will lead to result?
2. I (instrumentality): will I get any outcome
(reward) for this result? What are they?
3. V (valence): do I value the outcomes that I get
and/or that are offered to me?
Vroom’s Expectancy theory
 Adam’s Equity theory
Equity:
1. Your input = Your outcome
2. Your input Other’s input
Your outcome = Other’s outcome
 Inputs Outcomes
1. Time 1. Pay
2. Education 2. Pay, bonus
3. Experience 3. Special attention
4. Skill 4. Work safety
5. Creativity 5. Career opportunity
6. Seniority 6. Status
7. Loyalty 7. Ambience
8. Age 8. Growth opportunity
9. Traits 9. Care
10. Effort 10. Recognition
11. Initiative 11. Participation
 Characteristics of effective compensation
system (1)

• It attracts talented specialists, maintains them and

continually motivates them achieve the goals of the
organization
• It satisfies employees’ needs (needs theories)
• It is perceived as valued (expectancy theory)
• It is perceived as fair (equity theory)
 Characteristics of effective compensation
system (2)
• It is individualized
! different people value different rewards;
! the same rewards are valued differently.
 Characteristics of effective compensation
system (3)
Embraces extrinsic and intrinsic rewards.

Extrinsic rewards are:

• financial (commission, performance bonuses, cost-of-
living, etc.) and
• non-financial (preferred lunch hours, assigned parking
spaces, own secretary, etc.)
 Goal-Setting theory
Employees are motivated when:
• They can participate in the process of
formulating of the goals (less resistance)
• Goals are SMART
 Encourage performance
Provide timely rewards that are valued by employees

To energize
employee
motivation

Define performance Facilitate performance

Set objectives Provide resources, remove
obstacles, careful selection of
employees