MOTIVATION &

REWARDS
 Definition of MOTIVATION

- the process of arousing and sustaining goal-

directed behavior

- set of forces that causes people

to engage in one behavior
rather than some alternative
behavior.
 Definition of MOTIVATION

INDIVIDUAL VIEWPOINT:
- Motivation is an internal state that leads to the
pursuit of objectives.
STANDPOINT OF
MANAGERS:
-Motivation is the process of
getting people to pursue
objectives.
MOTIVATION
THEORIES
MOTIVATIONAL THEORIES

1 GOAL-SETTING THEORY

-views that people are more highly

motivated when they have concrete
objectives to achieve. In other
words, goals energize people to try
harder.
MOTIVATIONAL THEORIES

1 GOAL-SETTING THEORY

3 IMPORTANT ASPECTS in order

to energize people to try harder:

1. Buy into the goals

2. Challenging Goals
3. Clear Goals
MOTIVATIONAL THEORIES

2 REINFORCEMENT THEORY

-based on the principle of cause and

effect – behaviors that are rewarded
tend to be repeated.
-Worker’s performance is
encouraged or discouraged
depending on the result of the
performance.
MOTIVATIONAL THEORIES

2 REINFORCEMENT THEORY

3 CONSEQUENCES of
Reinforcement Theory
1. Positive Reinforcement
2. Negative Reinforcement
3. Punishment
MOTIVATIONAL
MOTIVATIONAL
THEORIES THEORIES

3 NEEDS THEORY

-People are motivated to satisfy their

needs. The more the organization
can provide the means to meet the
workers’ needs, the harder they will
work to obtain those satisfiers.
MOTIVATIONAL
MOTIVATIONAL
THEORIES THEORIES

3 NEEDS THEORY

3 WELL-KNOWN Needs Theories

1. Maslow’s Hierarchy of Needs
2. ERG Theory
3. McClelland’s Set of Needs
MOTIVATIONAL
MOTIVATIONAL
THEORIES THEORIES

3 NEEDS THEORY
3.1 Maslow’s Hierarchy of Needs

SA
Esteem (ego)
er
rd
to

Love (Social)
es
gh
hi
o t
st

Safety & Security

we
Lo

Physiological
MOTIVATIONAL
MOTIVATIONAL
THEORIES THEORIES

3 NEEDS THEORY

3.2 ERG Theory

Clayton Alderfer modified Maslow’s theory
and are simplified into 3 categories:
1. Existence
2. Relationships
3. Growth
MOTIVATIONAL
MOTIVATIONAL
THEORIES THEORIES

3 NEEDS THEORY

3.2 ERG Theory

SA Growth
Esteem
(ego)

Love (Social)
Relationships
Safety & Security
Existence
Physiological
MOTIVATIONAL
MOTIVATIONAL
THEORIES THEORIES

3 NEEDS THEORY
3.3 McClelland’s Need Theory
3 IMPORTANT NEEDS that motivate people
according to David McClleland:

1. Needs for Achievement

2. Needs for Power
3. Needs for Affiliation
MOTIVATIONAL
MOTIVATIONAL
THEORIES THEORIES

3 NEEDS THEORY
3.3 McClelland’s Need Theory

Need for Achievement – is a

strong drive to accomplish
things, in which the individual
receives great satisfaction from
personal attainment and goal
completion.
MOTIVATIONAL
MOTIVATIONAL
THEORIES THEORIES

3 NEEDS THEORY
3.3 McClelland’s Need Theory

Need for Power - is the desire to

influence and control other
people.
MOTIVATIONAL
MOTIVATIONAL
THEORIES THEORIES

3 NEEDS THEORY
3.3 McClelland’s Need Theory
Need for Affiliation – a
strong desire to be liked by
others, to receive social
approval, and to establish
close interpersonal
relationships.
MOTIVATIONAL
MOTIVATIONAL
THEORIES THEORIES

HUMAN RELATIONS PERSPECTIVE

4 THEORY

The main idea of human relations

perspective theory is how dealings
motivate people.
MOTIVATIONAL
MOTIVATIONAL
THEORIES THEORIES

HUMAN RELATIONS PERSPECTIVE

4 THEORY

4.1 McGregor’s Motivational Theories

Douglas McGregor assumes two opposite

views about human nature which might be
used as the basis of how managers deal with
workers: THEORY X and the THEORY Y.
MOTIVATIONAL
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THEORIES THEORIES

HUMAN RELATIONS PERSPECTIVE

4 THEORY

4.1 McGregor’s Motivational Theories

SA Theory Y - a set of
Esteem assumptions of how to manage
(ego) individuals motivated by
higher order needs
Love (Social)
Theory X - a set of assumptions
Safety & Security of how to manage individuals
motivated by lower order needs
Physiological
MOTIVATIONAL
MOTIVATIONAL
THEORIES THEORIES

HUMAN RELATIONS PERSPECTIVE

4 THEORY

4.1 McGregor’s Motivational Theories

Theory X managers believe employees:
• need to be controlled
• don’t like work

• need to be pushed to be

more productive
• need incentive schemes

• have to be directed to do things they don’t enjoy

MOTIVATIONAL
MOTIVATIONAL
THEORIES THEORIES

HUMAN RELATIONS PERSPECTIVE

4 THEORY

4.1 McGregor’s Motivational Theories

Theory Y managers believe employees:
• want to be involved
• can think for themselves and make decisions
• share ownership of tasks
• will find work more rewarding if given
responsibility and a variety of tasks
• have good ideas
• can engage in some form of self-management
MOTIVATIONAL
MOTIVATIONAL
THEORIES THEORIES

HUMAN RELATIONS PERSPECTIVE

4 THEORY

4.1 McGregor’s Motivational Theories

☹ Theory X workers tend to be unhappy in the

workplace.

☺ Theory Y workers are more productive

and motivated.
MOTIVATIONAL
MOTIVATIONAL
THEORIES THEORIES

5 WORK DESIGN THEORY

-Focus on the work itself rather than the

supervisor and the organization.

2 BEST-KNOWN THEORIES ARE:

1. Herzberg’s two-factor theory
2. Hackman-Oldham model job design.
MOTIVATIONAL
MOTIVATIONAL
THEORIES THEORIES

5 WORK DESIGN THEORY

5.1 Herzberg’s Two-Factor Theory
Hygiene Factor – contextual or extrinsic aspects
of the job. They corresponds to the lower level
needs in Maslow’s theory.

Motivators – are intrinsic rewards derived from

work itself that provide continuous simulation to
strive for the best possible performance level.
MOTIVATIONAL
MOTIVATIONAL
THEORIES THEORIES

5 WORK DESIGN THEORY

5.2 Hackman-Oldman Model
-is based on the idea that the task itself is key
to employee motivation. Specifically, a
boring and monotonous job stifles
motivation to perform well, whereas a
challenging job enhances motivation.
MOTIVATIONAL
MOTIVATIONAL
THEORIES THEORIES

6 ROLE OF PEOPLE’S PERCEPTION

THEORY
- Holds that people are motivated based on
how they perceive that certain work
behaviors will be rewarded and how fair or
equitable the rewards will be.

There are 2 WELL-KNOWN Perception

Theories: EXPECTANCY THEORY and
EQUITY THEORY
MOTIVATIONAL
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THEORIES THEORIES

6 ROLE OF PEOPLE’S PERCEPTION

THEORY
6.1 Expectancy Theory
- The degree of effort given to a particular
work depends on people’s beliefs that their
actions will produce outcomes they find
valuable and attractive.
MOTIVATIONAL
MOTIVATIONAL
THEORIES THEORIES

6 ROLE OF PEOPLE’S PERCEPTION

THEORY
6.1 Expectancy Theory
This theory observes 3 relationships:

1. Effort-performance relationship
2. Performance-outcome relationship
3. Valences
MOTIVATIONAL
MOTIVATIONAL
THEORIES THEORIES

6 ROLE OF PEOPLE’S PERCEPTION

THEORY
6.1 Expectancy Theory

Effort-performance relationship -
belief that effort leads to performance
MOTIVATIONAL
MOTIVATIONAL
THEORIES THEORIES

6 ROLE OF PEOPLE’S PERCEPTION

THEORY
6.1 Expectancy Theory
Performance-outcome relationship -
belief that performance is related to
rewards
MOTIVATIONAL
MOTIVATIONAL
THEORIES THEORIES

6 ROLE OF PEOPLE’S PERCEPTION

THEORY
6.1 Expectancy Theory

Valence - value or importance placed

on a particular reward
MOTIVATIONAL
MOTIVATIONAL
THEORIES THEORIES

6 ROLE OF PEOPLE’S PERCEPTION

THEORY
6.1 Expectancy Theory
This theory facilitates to explain the varying degree
of performances among workers.

REASONS:
1. No uniform way to motivate people
2. Efforts are not properly assessed
3. Measuring performance is difficult
4. Individualized rewards are more
motivating
MOTIVATIONAL
MOTIVATIONAL
THEORIES THEORIES

6 ROLE OF PEOPLE’S PERCEPTION

THEORY
6.2 Equity Theory
-is based on the developed beliefs or perception
of workers about fairness relative to their
assessment of their inputs (contributions) and
outcomes (rewards).
MOTIVATIONAL
MOTIVATIONAL
THEORIES THEORIES

6 ROLE OF PEOPLE’S PERCEPTION

THEORY
6.2 Equity Theory

Personal Outcomes VS Others’

Outcomes
Input
Input
MOTIVATIONAL
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THEORIES THEORIES

6 ROLE OF PEOPLE’S PERCEPTION

THEORY
6.2 Equity Theory

Fairness is achieved when the ratios are the

same. If not, workers craft a psychological state
called cognitive dissonance. This creates
discontent on the affected employees and
results in attempts to bring the ratios back into
balance.
MOTIVATIONAL
MOTIVATIONAL
THEORIES THEORIES

6 ROLE OF PEOPLE’S PERCEPTION

THEORY
6.2 Equity Theory
Workers who perceived being inequitably treated can use the
following methods in attempts to balance the ratio:

1. Reduce inputs by cutting back the effort contribution

2. Influence the outcome by documenting his achievement to
convince superior for a raise or promotion.
3. Decrease other’s outcome such as spreading rumors to affect
other’s performance
4. Increase effort levels to reduce the dissatisfaction resulting from
guilt.
 PAY AND
PERFORMANCE
PAY AND PERFORMANCE

COMPONENTS OF PAY

1.Basic Salary
2.Allowances
3.Bonuses
4.Benefits
5.Profit sharing
6.Stock Options
7.Commissions
PAY AND PERFORMANCE
PAY AND PERFORMANCE

RELATIONSHIP
PAY

PERFORMANCE
PAY AND PERFORMANCE
PAY AND PERFORMANCE

RELATIONSHIP

HIGH PAY = HIGH PERFORMANCE

Money is the driving factor that gets most

people working.

Has positive influence on performance

PAY AND PERFORMANCE
PAY AND PERFORMANCE

RELATIONSHIP

HIGH PAY = LOW PERFORMANCE

 Increases pressure which impairs a

persons ability to carry out tasks
effectively.
 Too much money can have the opposite
effect.
PAY AND PERFORMANCE
PAY AND PERFORMANCE

RELATIONSHIP

HIGH PAY = INCONSISTENT

PERFORMANCE
 Financial stability
 Working environment
 Personal well-being
PAY AND PERFORMANCE
PAY AND PERFORMANCE

RELATIONSHIP

LOW PAY = HIGH PERFORMANCE

 There is recognition of employees
 Employees are satisfied with their jobs
PAY AND PERFORMANCE
PAY AND PERFORMANCE

In summary:
There is no clear relationship between pay and
performance.

 Pay is more of a safety blanket than a motivator

 Performance-related pay is more effective in roles where
performance is easily measured
 Too much money can drive performance down
 Performance-related pay has a tendency to produce
temporary compliance rather than sustained improvement.
PAY AND PERFORMANCE
PAY AND PERFORMANCE

HOW IS PERFORMANCE AFFECTED?

 Not all rewards are based on individual performance, thus

demotivating other top performers.
 Some employees feel that they are not adequately paid
compared to those performing similar work in other
organizations.
 They also believe their pay is below the level of their job
performance.
 Employees often perceive there are poor performers in the
organization who are earning as much as they earn.