Industrial and Organizational Psychology

By Michael G. Aamodt

Chapter 9 – Motivating Employees

I. Motivation – the internal force that drives a worker to action as well as the external factors that
encourages that action
II. Is an employee predisposed to being motivated?
a. That is, some employees come to most jobs with a tendency to be motivated, whereas others
come with the tendency to be unmotivated
i. Personality (Theory on Traits)
1. Uses the concept of OCEAN (five-factor theory)
a. Conscientiousness is the best predictor of work performance, OCB, and
academic performance; stability is most associated with salary and
setting high goals; and extraversion is most highly correlated with the
number of promotions received
ii. Self-Esteem – the extent to which a person views himself as valuable or worthy.
1. Korman’s Consistency Theory – employees will be motivated to perform at levels
consistent with their levels of self-esteem. It tells us that there is a positive
correlation between self-esteem and performance. It also states that employees
with high self-esteem actually desire to perform at high levels and employees
with low self-esteem desire to perform at low levels. Thus, low self-esteem
employees will desire to perform at lower levels than their actual abilities would
allow
a. Three types of self-esteem
i. Chronic Self-esteem – a person’s overall feeling about himself
ii. Situational Self-esteem (aka Self-efficacy) – a person’s feeling
about himself in a particular situation. Knowing one’s capacity for
a particular task
iii. Socially-influences self-esteem – how a person feels about
himself on the basis of the expectations of others
2. Ways of increasing Self-esteem
a. Self-Esteem workshops and outdoor experiential training
b. Experience with Success – based on the principle of self-fulfilling
prophecy
i. Self-fulfilling prophecy – states than an individual will perform as
well or as poorly as he expects to perform. In other words, people
behave in ways consistent with their self-image.
1. Galatea Effect – relationship between self-expectations
and performance. When high self-expectations result in
higher levels of performance
c. Supervisor Behavior – the idea here is that if an employee feels that a
manager has confidence in him, his self-esteem will increase, then his
performance

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 i. Pygmalion Effect – the idea that if people believe that something
is true, they will act in a manner consistent with that belief.
ii. Golem Effect – when negative expectations of an individual
(oneself or supervisor) cause a decrease in that individual’s
performance
1. There’s a little support for the notion that teaching the
“Pygmalion Leadership Style” would change the way
supervisors treated their employees and thus increase
employee self-esteem
iii. Intrinsic Motivation – work motivation in the absence of external factors. People will seek
to perform well because they enjoy performing actual tasks or enjoy the challenge of
successfully completing the task.
1. Extrinsic Motivation – work motivation that arises from such non-personal factors
as pay, coworkers, and opportunities advancement. When they are extrinsically
motivated, they don’t particularly enjoy the tasks but are motivated to perform
well to receive some type of reward
a. Work Preference Inventory – a measure of an individual’s orientation
toward intrinsic versus extrinsic motivation. It yields scores on two
dimensions of each type of motivation (IM: enjoyment and challenge;
EM: compensation, outward orientation)
iv. McClelland Theory of Needs
1. Need for Achievement – the extent to which a person desires to be successful.
Employees with high need for achievement are motivated by jobs that are
challenging and over which they have some control, whereas employees who
have minimal achievement needs are more satisfied when jobs involve little
challenge and have a high probability of success.
2. Need for Affiliation – the extent to which a person desires to be around other
people. Employees high with this need are motivated by jobs in which they can
work with and help other people.
3. Need for Power – the extent to which a person desires to be in control of other
people.
III. Have the Employee’s Values and Expectations been met?
a. Job Expectations – a discrepancy between what an employees expected a job to be like and the
reality of the job can affect motivation and satisfaction. If the company does less than it promised,
employees will be less motivated to perform well and will retaliate by doing less than they
promised
i. Realistic Job Preview is very important to be applied to the employees to reduce the
problem
b. Job Characteristics Theory by Hackman and Oldham – suggests that certain characteristics of a job
will make the job more or less satisfying, depending on the particular needs of the worker.
Employee desires job that are meaningful, provide them with opportunity to be personally
responsible for the outcome of their work (autonomy), and provide them feedback about the
results of their performance.
i. Jobs will have motivational potential if:

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 1. Skill Variety – if they allow employees to use a variety of skills.
2. Task Identification – if there’s a chance to connect their efforts to an outcome
3. Task Significance – if their efforts has meaning, is useful, or is appreciated by
coworkers
c. Theories on Needs, Values, and Wants
i. Needs Theory – a theory based on the idea that employees will be satisfied with jobs that
satisfy their needs
ii. Maslow’s Hierarchy of Needs – proposed five major types of needs and that these needs
are hierarchical, means that lower-level needs must be satisfied before an individual will
be concerned with the next level of needs
1. Basic Biological Needs – concerns foods, shelter, water and the like. People at this
level might say “I can’t complain, I pay the bills”
2. Safety needs – concerning the needs for security, stability or job security, and
physical safety
3. Social needs – it concerns the need to interact with other people
4. Ego needs or Esteem needs – concerns the need for success and recognition
5. Self-actualization needs – concerning the need to realize one’s potential. “Be all
that you can be”.
a. Evaluation of the theory
i. Some scholar says that Maslow’s five levels might be too many
ii. Some people are known to skip levels; some people do not
progress up the Hierarchy as Maslow suggests they do
iii. Research shows that the idea “once the needs at one level are
satisfied, the next need level should become more important”
does not necessarily happens
iii. Aldefer’s ERG Theory – describes three levels of satisfaction: existence, relatedness, and
growth. Other than the number of levels, the major difference between ERG and Maslow
theory is that Aldefer suggested that people can skip levels. He also explains why a higher-
level need sometimes does not become more important once a lower-level need has been
satisfied. Existence is similar to Physiological and Safety needs; Relatedness is to Social
needs; and Growth is to Ego and Self-actualization needs.
iv. Herzberg’s Two-Factor Theory – postulates that there are two factors involved in job
satisfaction: Hygiene Factors and Motivators
1. Hygiene Factors – job-related elements that result from but do not involve the
job itself. It is similar to the first three levels of Maslow’s Hierarchy of needs. It
includes pay and benefits, making new friends, and job security
2. Motivators – job elements that do concern actual tasks and duties. Similar to the
last two levels of Maslow’s theory. Examples of which is the level of responsibility,
the amount of job control, and the interest that the work holds for the employee.
a. Hygiene factors are necessary but not sufficient for job satisfaction and
motivation. If a hygiene factor is too low (low pay), the employee will be
dissatisfied and less motivated. But if all hygiene factors are represented
adequately, the employee’s level of satisfaction and motivation will only

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 be neutral. Only the presence of both hygiene factors and motivators can
bring job satisfaction and motivation.
i. An employee who is paid a lot of money but has no control over
his job will probably be neither motivated nor unmotivated
ii. An employee who is not paid enough will be unmotivated, even
though he may have a tremendous control over his job
iii. An employee who is paid well and has control will probably be
motivated
IV. Do employees have achievable goals
a. Goal-Setting – a method of increasing performance in which employees are given specific
performance goals to aim for. The goals should possess certain characteristics represented by the
acronym: SMART
i. Specific – the more specific the goal, the greater the productivity
ii. Measurable
iii. Difficult but Attainable
iv. Relevant
v. Time Bound – goals work best when there is a time frame for their completion
V. Are employees receiving feedback on their goal process?
a. Feedback should be provided to employees about their progress in reaching their goals to increase
the effectiveness of goal-setting. Feedback best increases performance when it is positive and
informational rather than negative and controlling.
b. Self-Regulation Theory – postulates that employees can be motivated by monitoring their own
progress toward the goals they set and adjusting their behavior to reach those goals.
VI. Are employees rewarded for achieving goals?
a. An essential strategy for motivating employees is to provide an incentive for employees to
accomplish the goals set by an organization. The basis for this method are operant conditioning
principles
i. Operant Conditioning – employees will engage in behaviors for which they are rewarded
for not making errors, and avoid behaviors for which they are punished
b. Six (6) Factors must be considered:
i. Timing of the Incentive – denotes the use of Schedules of Reinforcement
ii. Contingency of Consequence – it should at least be made clear that the employee
understands the behaviors that brought reward or punishment.
iii. Type of Incentive Used
Premack Principle – states that reinforcement is relative and that a supervisor
can reinforce an employee with something that on the surface does not appear
to be a reinforcer. The best way to explain this is with the use of Reinforcement
Hierarchy. Example of which is rewarding performance of a very boring task by
allowing one to perform a less boring task
1. Financial Rewards
2. Recognition
a. Social Recognition – uses methods as personal attention, signs of
approval, and expressions of appreciation
3. Travel

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iv. Use of individual-based versus group-based incentives
1. Individual Incentive plans
a. Pay for performance aka Earning-at-risks plans – pay employees
according to how much they individually produce.
i. Commission – being paid for each unit of something sold
ii. Piecework – being paid for each unit of something produced
b. Merit Pay plans – base their incentives on performance appraisal scores
rather than objective measures such as sales and productivity.
2. Group Incentive Plans
a. Profit Sharing – developed by Albert Gallatin in 1794. Profit-sharing
programs provide employees with a percentage of profits above a certain
amount.
b. Gainsharing – developed by the Nunn-Bush Shoe Company in 1935.
Employees are paid a bonus based on improvements in group
productivity
i. Baseline – the level of productivity before the implementation of
the gainsharing plan
c. Stock Options – most complicated group-based incentive plan.
Employees are given the opportunity to purchase stocks in the future,
typically at the marker price on the day the options were granted. The
idea is that as a company does well, the value of its stock increases, as
does the employee’s profit.
v. Vromm’s Expectancy Theory – motivation is a function of expectancy, instrumentality,
and valence
Motivation = E (I x V)
1. Expectancy – the perceived relationship between the amount of effort an
employee puts in and the resulting outcome
2. Instrumentality – the extent to which the outcome of a worker’s performance, if
noticed, results in a particular consequence
3. Valence – the extent to which the employee values a particular consequence
a. In terms of expectancy, if an employee believes that no matter how hard
he works he will never reach the necessary level of performance, then his
motivation will probably be low.
b. For instrumentality, the employee will be motivated only if his behavior
results in some specific consequence. That is, if the employee works extra
hours, he expects to be rewarded, or if he is inexcusably absent from
work, he expects to be punished.
i. For a behavior to have a desired consequence, two events must
occur
1. The employee’s behavior must be noticed – if the
employee believes he is able to attain the necessary level
of performance but that his performance will not be
noticed, then his level of motivation will be low

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 2. Noticed behavior must be rewarded – if no rewards are
available, motivation will be low. Remember the operant
conditioning principle.
c. For Valence, if an employee is rewarded, the reward must be something
he values. If good performance is rewarded by an award, then the
employee will be motivated if he values awards. Likewise, if punish an
employee by suspending him, the suspension will be effective only if he
needs money.
d. Criticisms
i. The components equation – some suggested that adding the
components rather than multiplying them would be more
appropriate. When a component is zero, the result will be zero
even when ratings in the other components are high
ii. Involves the values assigned to each component. Even though
valence and instrumentality can be reliably measured, the theory
is most predictive if:
1. People behave rationally
2. Employees have an internal locus of control
vi. The use of positive incentives (rewards) vs. negative incentives (punishments)
VII. Are rewards and resources given equitably?
a. Equity theory – based on the premise that employees’ levels of motivation and job satisfaction
are related on how fairly they believe they are treated in comparison with others. Employees will
be satisfied if their ratio of effort to reward is similar to that of other employees. It is composed
of three components
i. Inputs – those personal elements (time, effort, education and experience) that we put
into our jobs.
ii. Outputs – elements that we receive from our jobs. Includes pay, benefits, challenge,
friends etc.
iii. Input/Output Ratio – the ratio of how much employees believe they put into their jobs to
how much they believe they get from their job.
1. When an employee’s ratio is lower than those of others, he will become
dissatisfied and be motivated to make the ratios equal in one or more ways
b. Organizational Justice – a theory that postulates that if employees perceive they are treated fairly,
they will be motivated. Whereas equity theory was limited to work outcomes (output),
organizational justice focused on fairness of many aspects of work such as:
i. Procedural Justice – the process of how the decisions are made
ii. Distributive Justice – the outcome of the decisions
iii. Interactional Justice – ways in which the decisions and other information are
communicated to other employees
VIII. Are other employees motivated?
a. Social Influence Theory
i. Employees observe the levels of motivation and satisfaction of other employees and then
model those levels

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ii. If an organization’s older employees work hard and talk positively about their jobs and
their employer, new employees will model this behavior and be both productive and
satisfied. The reverse is also true

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