Topic 5: Motivation

LEARNING OUTCOMES

1. Define motivation
2. Compare and contrast early theories of motivation
3. Compare and contrast contemporary theories of motivation
4. Discuss current issues in motivation

5.1 Definition of motivation

5.1.1 Definition of motivation

According to Stoner, motivation is about factors that cause, direct and sustain an individual’s
behavior.

Motivation concerned with why people do things they do and avoid doing things that they do
not want to do.

5.1.2 Motivation process

Unsatisfied Search Satisfied

need behavior need

Reduction of
tension

I. Unsatisfied need.
- An unsatisfied need, desire or motive initiates motivation.
- Example - A student unable to get an A for his first management test.

II. Search behavior.

- An unsatisfied need, desire and motive cause tension within individual.
- To reduce the tension, individual often engage in certain behavior.
- Example - To get an A for his second management test, the student study very hard and
always seek consultation from his lecturer.
III. Satisfied need
- The behavior engaged by individual is directed towards a goal; to satisfy the needs.
- Example - The student manage to get an A for his second management test due to his effort.

IV. Reduction of tension.

- When the need is satisfied, people will feel rewarded and thus reduced the amount of tension.
- Example - The student feels happy when he gets an A for his second management test.
- The reduction of tension will inform the individual that chosen behavior is appropriate and
can be used again in the future.

5.2 Early theories of motivation

5.2.1 Maslow’s Hierarchy of Needs

– This theory was introduced by Abraham Maslow.

– Maslow states that all people have a set of five needs which can be ranked in hierarchy
(from the lowest to the highest).
– According to this theory, the higher level of needs may not be reached before the lower
level is satisfied (progression principle).
– People are motivated by the unfulfilled needs and not the satisfied needs.
– The diagram below illustrates the five levels of individual’s needs:

1. Physiological needs
• It is our most basic needs necessary for our survival.
• Example: Food, water and shelter.
 2. Safety and security needs
• Needs deal with our physical and psychological safety from external threats.
• Example: Job security and freedom from any threat.

3. Social needs or sense of belonging.

• Need for companionship or personal sense of belonging.
• Example: Need to be loved, need to love somebody and need for social interaction.

4. Self-esteem needs
• The desire for positive self-image.
• Also known as growth need.
• Example: Respect from others, opportunities for advancement, recognition,
achievement, prestige and status.

5. Self-actualization
• Need for sell-fulfillment which is the highest need category.
• Concern with developing of one’s full potential or realization of one’s own potential.
• Example: opportunity to be creative and training for challenging assignments and
advancement.

5.5.2 McGregor’s Theories X and Y

– The human resource model developed by McGregor, identifies two set assumptions about
employees which is known as theory X and theory Y:
– In theory X, managers have pessimistic view of employees.
a. Its view on employees:
i. Inherently dislike work.
ii. Avoiding work whenever possible.
iii. Avoiding responsibility.
iv. Lacking of ambition.
v. Resistance to change.
vi. Feeling the work is of secondary important.
vii. Preferring to be led than to lead.
ix. Having to be push by managers to work.
 b. Theory X policy:
i. The managers have to apply autocratic style of leadership where employees have to
be constantly directed and controlled (coercive power – refer previous chapter)

Theory Y managers have more optimistic view on employees.

Its view on employees.
i. Willing to work – work is as natural as play or rest.
ii. Willing to accept responsibility.
iii. Capable of self-direction.
iv. Capable of self-control.
v. Frequently using imagination and creativity in accomplishing tasks.

Theory Y policy:
i. Manager must encourage full participation in important matters, continually
broadening subordinate self-direction and self-control (participative
management).
ii. Manager must create an environment in which all members contribute to the limits
of their credibility.

5.2.3 Herzberg’s Two-Factor Theory

– This theory is introduced by Frederick Herzberg.

– The theory concluded that individual’ work satisfaction and dissatisfaction arise from two
different sets of factors:
1) Dissatisfiers factors
• It is also known as hygiene factor.
• It is associated with job context (environment in which the job is performed)
• Hygiene factor causes feeling of job dissatisfaction.
• Factors that lead to job dissatisfaction: Company policy and administration,
supervisor, relationship with supervisor, working condition, relationship with
peers, status and security.
 2) Satisfier factor
• It is also known as motivating factor.
• It is associated with the job content (What people do in their work)
• Satisfier factor causes the feelings of satisfaction.
• Factors that lead to job satisfaction: Sense of achievement, desire for recognition,
the work itself, opportunity to take responsibility, prospect for advancement and
growth.

a. According to Herzberg, both dissatisfier and satisfier factors are separate entities;
the absence of one does not affect the other.
b. Thus, implication associated with the two-factor theory are:
i. Improvement made in the dissatisfier factors can prevent or eliminate job
dissatisfaction. However, they will not improve job satisfaction.
ii. Improvement made in satisfier factors can increase job satisfaction. However,
they will not prevent job dissatisfaction.

5.2.4 McClelland’s Three Needs Theory

– This model focuses on three important needs in the work environment:

a) Need for achievement
• It is the drive to do well, strive for excellence and overcome challenges and obstacles
in the pursuit of goals.
• Individuals with high need for achievements like to set their own goals and favor task
that provide immediate feedback.
• Therefore, managers who want to motivate high achievers need to ensure that such
individuals have challenging but obtainable goals that allow relatively immediate
feedback about their progress.

b) Need for power

• It is the drive to control, influence and to have impact on others and change the
situation.
• It may involve personal power (needed to demonstrate their ability to influence and
control others) and institutional power (needed to solve problems and organizational
goals).
 c) Need for affiliation
• It is the drive to establish, maintain, or renew affective relationship with others.
• Individuals with high need for affiliation are likely to find a career that involves high
levels of interaction with others such as teachers, counseling and sales.

5.3 Contemporary theories of motivation

5.3.1 Goal-setting theory

– Goal-setting theory refers to the proposition that specific goals increase performance and
those difficult goals, when accepted, result in higher performance than do easy goals
– A process theory of motivation that focuses on the process of setting goals
– Based on this theory, people will not be motivated if they do not possess the skill needed
to achieve a goal.
– Goals must meet five requirements → SMART
Specific: Goals must be clear and unambiguous. When goals are specific, they tell
employees exactly what is expected, when, and how much.
Measurable: If your goals are not measurable, you never know whether your employees
are making progress toward their successful completion
Attainable: Goals must be realistic and attainable by average employees. Goals that are
set too high or too low become meaningless, and employees naturally come to ignore them.
Realistic: If the goal is too high, employees will see no point in trying.
Time-bound: Goals must have starting points, ending points, and fixed durations.
Commitment to deadlines helps employees to focus their efforts on completion of the goal
on or before the due date.

5.3.2 Self-efficacy

– The term ‘self-efficacy” was first coined by psychologist Albert Bandura (1977) a Canadian-
American psychologist and a professor at Stanford University.
– Self-Efficacy is a person’s particular set of beliefs that determine how well one can execute
a plan of action in prospective situations (Bandura, 1977). To put it in more simple terms,
self-efficacy is a person’s belief in their ability to succeed in a particular situation.
– Self-efficacy refers to an individual’s belief that he or she is capable of performing a task.
Source: https://www.simplypsychology.org/self-efficacy.html

5.3.3 Reinforcement theory

– Reinforcement theory can be defined as the theory that behavior is a function of its
consequences.
– It was introduced by Edwin-A-Locke in the 1960’s.
– It is a motivation theory based on the relationship between given behavior and its
consequences.
– It means that, behavior with positive effects tends to be repeated and behavior with
negative effects tends not to be repeated.
– Example: People obey the law because they have learned at school that breaking the law
leads to punishment.
– There are four (4) basic reinforcement strategies and they as below:

Positive Reinforcement
It increases the probability that a behavior will occur by administering positive
consequences to employees who perform the behavior. Potential positive reinforcers
include pay, bonuses, promotions, job titles, verbal praise, and awards.
e.g.: employee is praised for good work done

Negative Reinforcement
It increases the probability that a desired behavior will occur by removing a negative
consequence when an employee performs the behavior. Subordinates experiencing
negative reinforcement learn the connection between a desired organizational behavior
and a consequence
e.g.: manager keep complaining and only stops when employee starts cleaning the room
 Extinction
Removing a consequence that is currently reinforcing an undesirable behavior in an effort
to decrease the probability that the behavior will occur again in the future
e.g.: an employee always has a habit of not being serious during the meeting by telling
jokes. So, chairman refrains from laughing at his jokes. Finally, that employee realize that
he must pay more attention in the meeting

Punishment
Administering negative consequences to workers who perform undesirable behaviors in an
effort to decrease the probability that the behavior will occur again in the future
e.g.: using the example above, as a result of not being serious during the meeting, that
employee is reprimanded by the chairman

5.3.4 Expectancy theory

– It is a motivation theory that suggests motivation depends on individual’s expectations

about their ability to perform tasks and receive desired rewards.
– Expectancy theory concerned with the process that individuals use to achieve rewards and
not identifying types of needs.
– E.g.: Ahmad is student with a strong desire to get an A for his management course. His
on-going score is B+ and he has his final exam to take. Ahmad’s motivation to study hard
is influenced by the expectation that hard study will lead to an A on the final exam and the
expectation that an A on the final exam will result in an A for the course.

EFFORT
Expectancy
PERFORMANCE
Instrumentality
OUTCOMES: REWARDS
Valence
5.3.5 Equity theory

– Equity theory is a theory that focuses on individual’s perception of how fairly they are
treated relative to others.
– Equity exists when an individual perceive that his/her outcome/input ratio equals with the
others. The process of comparison may be depicted as follows:

Outcomes (Self) = Outcomes (Other)

---------------------- ------------------------
Inputs (Self) Inputs (Other)

– Three conditions may result in this comparison; overpayment inequity, underpayment

inequity and equity
a) Overpayment inequity: exists when a person perceives that his or her outcome/input
ratio is greater than the ratio of others
b) Underpayment inequity: exists when a person perceives that his or her outcome /input
ratio is less than the ratio of others
c) Equity: exists when an individual’s outcome/input ratio equals the outcome/input of
others
– Outcome from a job include pay, recognition, benefits and promotion.
– Input to a job includes education, experience and ability.
– People judge equity of their rewards by comparing them with:
a) The reward achieved by other people for similar input.
b) Some other effort that occurs to them.
– Individuals are motivated when they experience satisfaction with reward that they received
from their effort.
5.4 Current issues in motivation

5.4.1 Managing cross-cultural motivational challenges

• Maslow’s needs hierarchy argues that people start at physiological level and then
move progressively up the hierarchy in order.
– Maslow’s hierarchy of need is aligned with American culture
– But, in countries like Japan, where uncertainty avoidance characteristics are
strong, security needs would be the foundational layer of the needs hierarchy.

• Another motivation concept that clearly has an American bias is the achievement need.
The view that a high achievement need acts as an internal motivator presupposes two
cultural characteristics – a willingness to accept a moderate degree of risk (which
excludes countries with strong uncertainty avoidance characteristics) and a concern
with performance (which applies almost singularly to countries with strong
achievement characteristics). This combination is found in countries such as the United
States, Canada and Great Britain. On the other hand, these characteristics are
relatively absent in countries such Chile and Portugal.

5.4.2 Motivating unique groups of workers

• Motivating a Diverse Workforce

– Motivating a diverse workforce through flexibility:
• Men desire more autonomy than do women.
• Women desire learning opportunities, flexible work schedules, and
good interpersonal relations.

• Motivating a Diverse Workforce

– Compressed workweek
• Longer daily hours, but fewer days
– Flexible work hours (flextime)
• Specific weekly hours with varying arrival, departure, lunch and break
times around certain core hours during which all employees must be
present
– Job Sharing
• Two or more people split a full-time job
– Telecommuting
 • Employees work from home using computer links

• Motivating Contingent Workers

– Opportunity to become a permanent employee
– Opportunity for training
– Equity in compensation and benefits

• Motivating Low-Skilled, Minimum-Wage Employees

– Employee recognition programs
– Provision of sincere praise

5.4.3 Designing appropriate rewards programs

• Open-book management - a motivational approach in which an organization’s financial

statements (the “books”) are shared with all employees.
• Employee recognition programs - programs based on personal attention and
expression of interest, approval, and appreciation for a job well done.
• Pay-for-performance programs - variable compensation plans that pay employees on
the basis of some performance measure.
Topic 6: Controlling

LEARNING OUTCOMES

1. Explain the nature and importance of control

2. Describe the three steps in the control process
3. Explain how organizational performance is measured
4. Describe tools used to measure organizational performance

6.1 Definition of controlling

Stoner defined controlling as the process to ensure actual activities conform to planned
activities.

Controlling refers to the process of monitoring, comparing, and correcting work performance.

6.2 Importance of controlling

Assist management process

- Assist the management process by determining what and when it is necessary and the
way it is required.

Deal with change or uncertainty

- It deals with the constant change or uncertainty of the future.
- Example: Deal with change in product demand, new regulation and policies.

Deal with complexity

- As organization becomes bigger, they become more complex.
- Big organizations will have more workers, more activities and use advanced
technology.
- Control is needed to coordinate these activities and accomplish integration so that
organizational goals can be achieved.

Deals with human limitation

 - Organization consists of organization members and these members make mistake.
- E.g.: make wrong forecast and filling wrong orders.
- Controlling will help to identify the mistakes.

Help delegation and decentralization to run smoothly

- When managers delegate authority to employees, these employees need to be
monitored so that they will not make any mistakes or misuse their power.
- Control enables managers to check on mistakes and performance of subordinates.

6.3 Process of control

Adjust standard
Set performance standards

Measure Actual performance

Adjust performance

Compare actual performance with actual standards

If no deviations… If deviations are acceptable…

Take no corrective action Take corrective action

feedback feedback

Step 1: Set performance standard

- Control process starts with the establishment of standard of performance.
- A standard is a target against which actual performance is compared.
- Standard must be measurable, specific and accepted by all organization members and
must be in line with the organization’s strategic planning.
- E.g.: Loan approval within 24 hours, and 4.0 point grade in MGT2013

Step 2: Measure the performance.

 - It is the most difficult step because it can be ongoing or repetition process.
- The measuring period will depend on situation but it must not be too long or too often.
- It comprise of 3 elements: -
1. What to measure?
2. When to measure?
3. How frequently to measure?

Step 3: Compare actual performance with actual standards

- It is the easiest of all steps.
- Sometimes it can be difficult too depending on the nature of performance to be
measured.
- E.g.: Performance appraisal.
- If performance match appraisal, no corrective action is required.

Step 4: Take corrective action

- This step is done only if the performance does not meet the earlier established
standard.
- Corrective action may include the following:
1. Changing standards (this may be too high or too low).
2. Providing more incentives to enhance performance).

6.4 Controlling organizational and employee performance

6.4.1 Definition of Organizational Performance

- Performance: the end result of an activity.

- Organizational performance: the accumulated results of all the organization’s work
activities.
6.4.2 Measures of Organizational Performance

1) Organizational Productivity

- Productivity is the amount of goods or services produced divided by the inputs needed
to generate that output.
- Organizations and individual work units want to be productive
- They want to produce the most goods and services using the least amount of inputs.
- Output is measure by the sales revenue an organization receives when goods are sold
(selling price X number sold).
- Input is measured by the costs of acquiring and transforming resources into outputs

2) Organizational Effectiveness

- Organizational effectiveness is a measure of how appropriate organizational goals are

and how well those goals are being met.
- That’s the bottom line for managers, and it’s what guides managerial decisions in
designing strategies in an effort to reduce expenses and maintain competitive store
pricing.

3) Industry and Company Rankings

- Industry and company rankings are a popular way for managers to measure their
organization’s performance.
- Rankings are determined by specific performance measures, which are different for
each list. For example, Fortune’s Best Companies to Work For are chosen by answers
given by thousands of randomly selected employee on questionnaire called “The Great
Place to Work Trust Index, and on materials filled out by thousands of company
managers, including a corporate culture audit created by the Great Place to Work
Institute. These rankings give managers (and others) an indicator of how well their
company performs in comparison to others. Wegmans Food Market is an example of
a great place to work. It has been on the Fortune list every year since 1998. It is not
surprising that 96% percent of Wegmans’s employees said that they have great bosses
and great rewards, and 97 percent indicated that the work atmosphere is great.
6.4.3 Controlling for Employee Performance

1) Delivering Effective Performance Feedback

- Managers need to provide their employees with feedback so that the employees know
where they stand in terms of their job performance
- Sometimes performance feedback does not work. An employee’s performance may
continue to be an issue. Under those circumstances, disciplinary action may be
necessary to address the problems.

2) Using Disciplinary Actions

- Most organizations require managers to follow a progressive disciplinary action policy.
- Progressive disciplinary action is intended to ensure that the minimum penalty
appropriate to the offense is imposed.
6.5 Types of control

6.5.1 Pre-action control (feed-forward)

- It is done at the input level of production and initiated before the start of production.
- The purpose is to anticipate potential problems and prevent from occurring.
- It is also known as preventive control because its objective is to prevent problems at
input levels before going through transformation process.
- E.g.: Specification of material resources and capital.
6.5.2 Steering control (concurrent control)
- Focus on work process or the transformation process.
- The purpose is to spot problems as they develop and take corrective action before final
result is achieved.
- E.g.: Zero defect campaign done by firms to prevent too much defect production.

6.5.3 Screening Control (Yes or No Control)

- Before proceeding to the next sequence, an activity, product or service must be
approved or meet specific condition.
- E.g.: bank procedure on corporate loan approval has to go through several stages
because it involves a large amount of money lent.

6.5.4 Post-action control (corrective control)

- It takes place after action is completed.
- It is also known as feedback control.
- If there are problems, post-action control is undertaken and applied to future activities.

Control System

Pre-Action Steering & Screening Post-action

Control Control Control

Inputs Transformation control Outputs

The controlling system

6.6 Tools for measuring performance

6.6.1 Financial controls

Every business wants to earn a profit. To achieve this goal, managers need financial controls.
For instance, they might analyse quarterly income statements for excessive expenses. They
might also calculate financial ratios to ensure that sufficient cash is available to pay ongoing
expenses, that debt levels have not become too high, or that assets are used productively.
Besides that, budget is both planning and control tools. When a budget is formulated, it is a
planning tool because it indicates which work activities are important and what and how much
resources should be allocated to those activities. But budget are also used for controlling,
because they provide managers with quantitative standards against which to measure and
compare resource consumption. If deviations are significant enough to require action, the
manager examines what has happened and tries to uncover why. With this information,
necessary action can be taken.

6.6.2 Information controls

Managers need the right information at the right time and in the right amount to monitor and
measure organizational activities and performance. A management information system (MIS)
is a system used to provide managers with needed information on a regular basis. MIS focuses
specifically on providing managers with information (processed and analysed data), not
merely data (raw, unanalysed data). An MIS collects data and turns them into relevant
information for managers to use.

Categories of Management Information Systems

https://www.smartsheet.com/management-information-systems

Additional
https://www.mywestford.com/blog/importance-of-management-information-system/

6.6.3 Balanced Scorecard

- Creating the balance scorecard (R.S. Kaplan and Norton)

- In the past, measures have been too focused on financial results. Today, management
needs a broader perspective which incorporates the interests of the various stakeholders
and requirements for achieving long term competitiveness
- For most businesses, the diverse “objectives‟ can be incorporated into four perspectives:

1. Financial perspective - meeting the objectives of shareholders - how do we appear to

shareholders?
2. Customer perspective - meeting the needs of customers in highly competitive markets -
how do customers see us?
3. Operational/internal business perspective – what must we excel at?
 4. Innovation and learning perspective - meeting the expectations and building up the
capabilities of employees whose skills determine the company’s future - can we continue
to improve and create value to satisfy future needs?

Financial perspective
Criteria/goals Measures
Survive Pay salary, Cash flow
Succeed Quarterly profits

Customer perspective
Criteria/goals Measures
Satisfaction Customer survey
Responsiveness On-time deliveries
Loyalty Repurchases

Operational/Internal business perspective

Criteria/goals Measures
Technological capability Competitive comparison
Quality Total quality philosophical elements
New product introduction Actual schedule vs planned Schedule

Innovation and Learning perspective

Criteria/goals Measures
Employee attitude Satisfaction surveys, interview, observation
Innovation Number of new products as compared to
competition, Freshness index
Employee development Training days

6.6.4 Benchmarking of best practices

- Benchmarking refers to the standard of excellence against which to measure and compare.

- Other definition: comparing your own product with the very best in the world, for example
we compare our products with Gardenia.