Fundamentals of

MANAGEMENT
Core Concepts & Applications
Griffin
Eleventh Edition

Chapter 16
Managing Employee Motivating and Performance
 Learning Objectives

• After studying this chapter, you should be able

to:
1. Characterize the nature of motivation, including its
importance and historical perspectives.
2. Identify and describe the major content perspectives on
motivation.
3. Identify and describe the major process perspectives on
motivation.
4. Describe reinforcement perspectives on motivation.
5. Identify and describe popular motivational strategies.
6. Describe the role of organizational reward systems in
motivation.
 Chapter Outline
• The Nature and elements of Motivation
• Motivation process/ framework and factors
• Content Perspectives on Motivation
– The Need Hierarchy Approach
– The Two-Factor Theory -- Individual Human Needs
• Process Perspectives on Motivation
– Expectancy Theory-- Equity Theory -- Goal-Setting Theory
• Reinforcement Perspectives on Motivation
– Kinds of Reinforcement in Organizations
– Providing Reinforcement in Organizations
• Popular Motivational Strategies
– Empowerment and Participation -- New Forms of Working Arrangements
• Using Reward Systems to Motivate Performance
– Effects of Organization Rewards
– Designing Effective Reward Systems
– Popular Approaches Made to Client
 The Nature of Motivation
• Motivation
– The set of forces that cause people to behave in certain ways.
– The goal of managers is to maximize desired behaviors and
minimize undesirable behaviors.
– Motivation is to inspire people to work, individually or in groups
in the ways such as to produce best results. It is the will to act.
– Motivation is getting somebody to do something because they
want to do it.

• The Importance of Motivation in the Workplace

– Determinants of Individual Performance

• Motivation helps people to:

– achieve goals, gain a positive perspective
– create the power to change, build self-esteem and capability
– manage their own development and help others with theirs
 Elements of Motivation

Three elements:

• Intensity: how hard a person tries

to achieve the goal
• Direction: willingness toward the
specific goal
• Persistence: how long a person
tries to achieve goal
 The Motivation Framework

Choice
Need or Search for ways of
behavior to
to satisfy satisfy need
deficienc
need
y

Determination
of
future needs Evaluation
and of
need satisfaction
search/choice for
satisfaction

The motivation processes through a series of discreet

steps. Content, process, and reinforcement
Figure 16.1
perspectives on motivation address different parts of The Motivation Framework
this process.
 Three Historical Perspectives of Motivation
i. Traditional Approach: The traditional approach is best represented by the
work of Frederick W. Taylor.
▪ He believed that managers knew more about the jobs being performed than
did workers, and he assumed that economic gain was the primary thing
that motivated everyone.
▪ Other assumptions of the traditional approach were that work is inherently
unpleasant for most people and that the money they earn is more important
to employees than the nature of the job they are performing.

ii. Human Relation Approach: The human relationists emphasized the role
of social processes in the workplace.
▪ Their basic assumptions were that employees want to feel useful and
important, that employees have strong social needs, and that these needs
are more important than money in motivating them.
▪ Advocates of the human relations approach advised managers to make
workers feel important and allow them a modicum of self-direction and
self-control in carrying out routine activities
10–7
 Historical Perspectives of Motivation: Contd. .
iii. The Human Resource Approach:
▪ The human resource approach to motivation carries the concepts of
needs and motivation one step further.
▪ Whereas the human relationists believed that the illusion of
contribution and participation would enhance motivation, the
human resource view assumes that the contributions themselves are
valuable to both individuals and organizations.
▪ It assumes that people want to contribute and are able to make
genuine contributions. Management’s task, then, is to encourage
participation and to create a work environment that makes full use
of the human resources available.
▪ This philosophy guides most contemporary thinking about
employee motivation.

10–8
 Content Perspectives on Motivation
▪ Content Perspectives
– Focus on needs and deficiencies of individuals
– Approaches to motivation that try to answer the question,
“What factors in the workplace motivate people?”

▪ Content Perspectives Theories of Motivation

– Maslow’s Hierarchy of Needs
– Alderfer ERG Theory
– Herzberg’s Two-Factor Theory
– McClelland’s Achievement,
Power, and Affiliation Needs
 Maslow’s Hierarchy of Needs
NEEDS
General Examples Organizational Examples

Self- Challenging
Achievement actualization job

Job
Status Esteem
title

Friends
Friendship Belongingness
at work

Pension
Stability Security
plan

Base
Food Physiology
salary

Source: Adopted from Abraham H. Maslow, “A Theory of Human Motivation,” Psychology Review, 1943, Vol. 50, pp. 370-396. Figure 10.2
 Content Perspectives on Motivation (cont’d)
i. The Need Hierarchy Approach (Maslow)
– People have five needs to satisfy:
• Physiological needs for basic survival and biological function.
• Security needs for a safe physical and emotional environment.

• Social/ Belongingness needs for love and affection.

• Esteem needs for positive self-image/self-respect and
recognition and respect from others.
• Self-actualization needs for realizing one’s potential for
personal growth and development.

– Weaknesses of Maslow’s theory

• Five levels of need are not always present.
• Ordering or importance of needs is not always the same.
• Cultural differences.
 Alderfer’s ERG Theory:
• Clayton Alderfer extended and simplified Maslow's Hierarchy into a
shorter set of three needs: Existence, Relatedness and Growth (ERG).
• Existence- At the lowest level is the need to stay alive and safe, now and
in the foreseeable future. When we have satisfied existence needs, we feel
safe and physically comfortable. This includes Maslow's Physiological and
Safety needs.

• Relatedness- At the next level, once we are safe and secure, we consider
our social needs. We are now interested in relationships with other people
and what they think of us. When we are related, we feel a sense of identity
and position within our immediate society. This encompasses Maslow's
Social and Esteem needs.

• Growth- At the highest level, we seek to grow, be creative for ourselves

and for our environment. When we are successfully growing, we feel a
sense of wholeness, achievement and fulfillment. This covers Maslow's
Self-actualization.
 Difference
• First, the ERG theory suggests that more than one level of need can cause
motivation at the same time- people can be motivated by a desire for
money (existence), friendship (relatedness), and the opportunity to learn
new skills (growth) all at once.

• Second, the ERG theory has a frustration-regression element. Thus, if

needs remain unsatisfied, the individual will become frustrated, regress to a
lower level, and begin to pursue those things again. For example, a worker
previously motivated by money (existence needs) may have just been
awarded a pay raise sufficient to satisfy those needs. If for some reason he
finds that it is impossible to become better friends with others in the
workplace, he eventually gets frustrated and regresses to being motivated
to earn even more money.

Copyright © by Houghton Mifflin Company. All rights reserved. 10–13

 Content Perspectives on Motivation (cont’d)
ii. The Two-Factor Theory (Herzberg)
– People’s satisfaction and dissatisfaction are influenced by two
independent sets of factors—motivation factors and hygiene
factors.
– Theory assumes that job satisfaction and job dissatisfaction
are on two distinct continuums:
• Motivational factors (work content) are on a continuum that
ranges from satisfaction to no satisfaction. If it present people
will be satisfied; if absent people will be dissatisfied.
• Hygiene factors (work environment) are on a separate
continuum that ranges from dissatisfaction to no dissatisfaction.
If it is absent people will be dissatisfied; if present people are not
satisfied or dissatisfied (neutral situation).
 The Two-Factor Theory of Motivation

Motivation Factors
Hygiene Factors
• Achievement
• Supervisors
• Recognition
• Working conditions
• The work itself Figure 16.3
• Interpersonal relations
• Responsibility
• Pay and security
• Advancement
and growth • Company policies and
administration

Satisfaction No satisfaction
Dissatisfaction No dissatisfaction

• The Two-Factor Theory (Herzberg)

– Criticisms of the Two-Factor Theory
• Interview findings are subject to different explanations.
• Sample population was not representative.
• Subsequent research has not upheld the theory.
Comparisons of Maslow, Herzberg, and Aldefer’s Theories
 Content Perspectives on Motivation (cont’d)
• Individual Human Needs (McClelland)
– The need for achievement
• The desire to accomplish a goal or task
more effectively than in the past.
– The need for affiliation
• The desire for human
companionship and
acceptance.
– The need for power
• The desire to be influential
in a group and to be in control
of one’s environment.
Process Perspectives on Motivation: Theories

•Process Perspectives
– Focus on ‘why people choose certain behavioral options to
satisfy their needs’ and ‘how they evaluate their satisfaction
after they have attained their goals.’

•Process Perspectives of Motivation

i.Expectancy Theory
ii.Porter-Lawler Extension of Expectancy Theory
iii.Equity Theory
iv.Goal-Setting Theory
 Process Perspectives on Motivation (cont’d)
i. Expectancy Theory (Developed by Victor Vroom)
– Motivation depends on how much we want something and how
likely we are to get it.
– The expectancy model of motivation is a complex but relatively
accurate portrayal of how motivation occurs. According to this
model, a manager must understand what employees want (such as
pay, promotions, or status) to begin to motivate them.
– Assumes that:
• Behavior is determined by a combination of personal and
environmental forces.
• People make decisions about their own behavior in
organizations.
• Different people have different types of needs, desires, and
goals.
• People choose among alternatives of behaviors in selecting
one that leads to a desired outcome.
 Process Perspectives on Motivation (cont’d)
• The Expectancy Model of Motivation
- Suggests that motivation leads to effort, when combined with ability and
environmental factors, that results in performance which, in turn, leads to
various outcomes that have value (valence) to employees.
Outcom Valence
e

Environmen Outcom Valence

t e

Motivatio Effort Performanc Outcom Valence

n e e

Abilit Outcom Valence

y e

Outcom Valence
e
Figure 16.4 The Expectancy Model of Motivation
 Process Perspectives on Motivation (cont’d)

ii. Porter-Lawler Extension of Expectancy Theory

– Assumptions:
• If performance in an organization results in equitable and fair
rewards, people will be more satisfied.
• High performance can lead to rewards and high satisfaction.

– Types of rewards:
• Extrinsic rewards—outcomes set and awarded by external
parties (e.g., pay and promotions).
• Intrinsic rewards—outcomes that are internal to the individual
(e.g., self-esteem and feelings of accomplishment).
 Process Perspectives on Motivation (cont’d)
• Porter-Lawler Extension of Expectancy Theory

Intrinsi
rcewards
(outcomes)

Perceived
Performance Satisfactio
equit
n
y
Extrinsic
rewards
(outcomes)

Source: Edward E. Lawler III and Lyman W. Porter, “The Effect of Performance
on Job Satisfaction,” Industrial Relations, October 1967, p. 23. Used with Figure 16.5
permission of the University of California.
Process Perspectives on Motivation (cont’d)
iii. Equity Theory
– People are motivated to seek social equity in the rewards
they receive for performance.

– Equity is an individual’s belief that the treatment he or she

receives is fair relative to the treatment received by others.

– Individuals view the value of rewards (outcomes) and

inputs of effort as ratios and make subjective comparisons
of themselves to other people.

outcomes (self) outcomes (other)

=
inputs (self) inputs (other)
 The Equity Process

Source: Van Fleet, David D., and Tim Peterson, Contemporary Management, Third Edition. Copyright ©
1994 by Houghton Mifflin Company. Used with permission.
 Process Perspectives on Motivation (cont’d)
• Equity Theory (cont’d)
– Conditions of and reactions to equity comparisons:
• Feeling equitably rewarded.
– Maintain performance and accept comparison as fair estimate.
• Feeling under-rewarded—try to reduce inequity.
– Change inputs by trying harder or slacking off.
– Change outcomes by demanding a raise.
– Distort the ratios by altering perceptions of self or of others.
– Leave situation by quitting the job.
– Change comparisons by choosing another object person.
• Feeling over-rewarded.
– Increase or decrease inputs.
– Distort ratios by rationalizing.
– Help the object person gain more outcomes.
 Process Perspectives on Motivation (cont’d)
iv. Goal-Setting Theory
– Assumptions
• Behavior is a result of
conscious goals and
intentions.
• Setting goals influences the
behavior of people in
organizations.
• Characteristics of Goals
– Goal difficulty
• Extent to which a goal is
challenging and requires
effort.
• People work harder to
achieve more difficult goals.
• Goals should be difficult but
attainable.
• Characteristics of Goals
(cont’d)
– Goal specificity
• Clarity and precision of the
goal.
• Goals vary in their ability to
be stated specifically.
– Acceptance
• The extent to which persons
accept a goal as their own.
– Commitment
• The extent to which an
individual is
personally interested in
reaching a goal.
 Process Perspectives on Motivation (cont’d)

• The Expanded Goal-Setting Theory of Motivation

Goal Goal Organizationa Intrinsic

difficult acceptanc l Reward
y e support s

Goal- Satisfactio
Performanc
Directed n
e
Effort

Goal Goal Individual Extrinsi

specificit commitmen abilities c
y t and Rewards
traits

Source: Reprinted by permission of the publisher, from Organizational Dynamics,

Autumn/1979, copyright © 1979 by American Management Association, New York. All
rights reserved. (http://www.amanet.org) Figure 16.6
 Reinforcement Perspectives on Motivation

i. Reinforcement Theory
– The role of rewards as they cause behavior to change or
remain the same over time.

– Assumes that:
• Behavior that results in
rewarding consequences
is likely to be repeated,
whereas behavior that
results in punishing
consequences is less likely
to be repeated.
Reinforcement Perspectives on Motivation (cont’d)

• Kinds of Reinforcement in Organizations

– Positive reinforcement
• Strengthens behavior with rewards or positive outcomes after
a desired behavior is performed.
– Avoidance
• Strengthens behavior by avoiding unpleasant consequences
that would result if the behavior is not performed.
– Punishment
• Weakens undesired behavior by using negative outcomes or
unpleasant consequences when the behavior is performed.
– Extinction
• Weakens undesired behavior by simply ignoring or not
reinforcing that behavior
Reinforcement Perspectives on Motivation (cont’d)

• Providing Reinforcement in Organizations

– Reinforcement schedules
• Fixed interval schedule—reinforcement applied at fixed time
intervals, regardless of behavior.
• Variable interval—reinforcement applied at variable time
intervals.
• Fixed ratio—reinforcement applied after a fixed number of
behaviors, regardless of time.
• Variable Ratio—reinforcement applied after a variable
number of behaviors, regardless of time.

– Behavior modification (OB Mod)

• A method for applying the basic elements of reinforcement
theory in an organizational setting.
• Specific behaviors are tied to specific forms of reinforcement.
 Schedules of Reinforcement in Organizations

Source: Van Fleet, David D., and Tim Peterson, Contemporary

Management, Third Edition. Copyright © 1994 by Houghton
Mifflin Company. Used with permission.
Copyright © by Houghton Mifflin Company. All rights reserved.
 Using Reward Systems to Motivate Performance (cont’d)

• Popular Approaches to Rewarding Employees

– Traditional systems
• Fixed hourly or monthly rate or an incentive system.
– Merit systems
• Employees get different pay raises at the end of the year depending
on their overall job performance.
– Incentive systems
• Employees get different pay amounts at each pay period in
proportion to what they do (e.g., piece-rate pay plans).
– Profit sharing plans
• Provides an annual bonus based to corporate profits.
– Gains haring
• All group members get bonuses when performance targets are
exceeded.
– Lump sum bonuses
• One-time reward, not an increase in base salary.
– Pay-for-knowledge
• Pay the individual rather than the job.
 Class Work
• Rohit Narang joined Apex Computers (Apex) in November after a successful stint
at Zen Computers (Zen), where he had worked as an assistant programmer. Rohit
felt that Apex offered better career prospects, as it was growing much faster than
Zen, which was a relatively small company. Rohit joined as a Senior Programmer
at Apex, with a handsome pay hike. He joined Aparna Mehta's five-member team.
While she was efficient at what she did and extremely intelligent, she had neither
the time nor the inclination to groom her subordinates. Time and again, Rohit
found himself thinking of Suresh, his old boss, and of how he had been such a
positive influence. Aparna, on the other hand, even without actively doing
anything, had managed to significantly lower his motivation levels.

Question:
1. What, according to you, were the reasons for Rohit's disillusionment? Answer the question
using Maslow's Hierarchy of Needs.

2. What should Rohit do to resolve his situation? What can a team leader do to ensure high
levels of motivation among his/her team members?

Copyright © by Houghton Mifflin Company. All rights reserved. 10–33

That’s all for Today

Thank You!