7.8: Motivating Employees

How do managers motivate employees to do quality work? This question is difficult to answer because people are motivated by different things at different stages in their life, their career, and their personal growth. Highly motivated employees focus their efforts on achieving specific goals. It’s the manager’s job, therefore, to motivate employees—to get them to try to do the best job they can. Motivated employees call in sick less frequently, are more productive, and are less likely to convey bad attitudes to customers and coworkers. They also tend to stay in their jobs longer, reducing turnover and the cost of hiring and training employees.

Personal Motivation

They may be intrinsically or extrinsically motivated, or by a combination of both.

Intrinsic motivation.This is when motivation comes from within; in other words, a person has it within themselves to be, stay, or become motivated. For example, a person may be intrinsically motivated by the enjoyment of doing a task, the satisfaction of a job well done, or the desire to achieve a work-related goal.

Extrinsic motivation. This is when motivation comes from external factors; in other words, a person needs an incentive to be, stay, or become motivated. For example, a person may be extrinsically motivated by the pay they receive, bonuses they receive, avoiding punishment, gaining recognition or prestige, or perks of the job.

Motivational Theories

Maslow’s Hierarchy of Needs

According to Maslow’s hierarchy of needs, the idea is that we need to satisfy lower-level needs before we move to the other levels; once we have satisfied the lower-level need(s), we move on to the next level as the previous one no longer satisfies us. Consider how this can play out in the workplace.

What implications does Maslow’s theory have for business managers? There are two key points: (1) Not all employees are driven by the same needs, and (2) the needs that motivate individuals can change over time. Managers should consider the needs that different employees are trying to satisfy and should structure rewards and other forms of recognition accordingly. For example, when you got your first job repossessing cars, you were motivated by the need for money to buy food. If you’d been given a choice between a raise or a plaque recognizing your accomplishments, you’d undoubtedly have opted for the money. As a city councillor, by contrast, you may prefer public recognition of work well done (say, election to higher office) to a pay raise.

As shown in Figure 7.5, Maslow’s Hierarchy of Needs ranges from the highest level (self-actualization) to the lowest level (physiological needs):

• Self-Actualization: Mortality, creativity, spontaneity, problem-solving, lack of prejudice, acceptance of facts
• Esteem: Self-esteem, confidence, achievement, respect of others, respect by others
• Social: Love/belonging through friendship, family, sexual intimacy
• Safety: Security of body, of employment, of resources, of the family, of health, of property
• Physiological: Breathing, food, water, sex, sleep, homeostasis, excretion

Two-Factor Theory

Another psychologist, Frederick Herzberg, set out to determine which work factors (such as wages, job security, or advancement) made people feel good about their jobs and which factors made them feel bad about their jobs. He surveyed workers, analyzed the results, and concluded that to understand employee satisfaction (or dissatisfaction), he had to divide work factors into two categories:

• Motivation factors: Those factors that are strong contributors to job satisfaction.
• Hygiene factors: Those factors that are not strong contributors to satisfaction but that must be present to meet a worker’s expectations and prevent job dissatisfaction.

Figure 7.6 illustrates Herzberg’s two-factor theory. Note that motivation factors (such as promotion opportunities) relate to the nature of the work itself and the way the employee performs it. Hygiene factors (such as physical working conditions) relate to the environment in which it’s performed.

Let’s start with hygiene factors. Are salaries reasonable? What about working conditions? Does each accountant have his or her own workspace, or are they crammed into tiny workrooms? Are they being properly supervised, or are they left on their own to sink or swim? If hygiene factors like these don’t meet employees’ expectations, they may be dissatisfied with their jobs.

Fixing problems related to hygiene factors may alleviate job dissatisfaction, but it won’t necessarily improve anyone’s job satisfaction. To increase satisfaction (and motivate someone to perform better), you must address motivation factors. Is the work itself challenging and stimulating? Do employees receive recognition for a job well done? Will the work that an accountant has been assigned help him or her to advance in the firm? According to Herzberg, motivation requires a twofold approach: eliminating “dissatisfiers” and enhancing satisfiers.

Expectancy Theory

If you were a manager, wouldn’t you like to know how your employees decide whether to work hard or goof off? Wouldn’t it be nice to know whether a planned rewards program will have the desired effect—namely, motivating them to perform better in their jobs? These are the issues considered by psychologist Victor Vroom in his expectancy theory, which proposes that employees will work hard to earn rewards that they value and that they consider “attainable”.

As you can see from Figure 7.7, Vroom’s expectancy theory argues that an employee will be motivated to exert a high level of effort to obtain a reward under three conditions: If the employee

• believes that his or her efforts will result in acceptable performance.
• believes that acceptable performance will lead to the desired reward.
• values the reward.

To apply expectancy theory to a real-world situation, let’s analyze an automobile-insurance company with one hundred agents who work from a call centre. Assume that the firm pays a base salary of $2,000 a month, plus a $200 commission on each policy sold above ten policies a month. In terms of expectancy theory, under what conditions would an agent be motivated to sell more than ten policies a month?

The agent would have to believe that his or her efforts would result in policy sales (that, in other words, there’s a positive link between effort and performance). The agent would have to be confident that if he or she sold more than ten policies in a given month, there would indeed be a bonus (a positive link between performance and reward). The $200 bonus per policy would have to be of value to the agent.

Now let’s alter the scenario slightly. Say that the company raises prices, thus making it harder to sell the policies. How will agents’ motivation be affected? According to expectancy theory, motivation will suffer. Why? Because agents may be less confident that their efforts will lead to satisfactory performance. What if the company introduces a policy whereby agents get bonuses only if buyers don’t cancel policies within ninety days? Now, agents may be less confident that they’ll get bonuses even if they do sell more than ten policies. Motivation will decrease because the link between performance and reward has been weakened. Finally, what will happen if bonuses are cut from $200 to $25? Obviously, the reward would be of less value to agents, and, again, motivation will suffer. The message of expectancy theory, then, is fairly clear: managers should offer rewards that employees value, set performance levels that they can reach, and ensure a strong link between performance and reward.

Equity Theory

What is the equity theory of motivation? The equity theory of motivation is the idea that what an individual receives for their work has a direct effect on their motivation. When applied to the workplace, it means an individual will generally aim to create a balance between what they give to the organization compared to what they get in return.^[1]

Equity theory was developed by John Stacey Adams, and you can read more about Equity theory in this article.

Let’s review this example. What if you spent thirty hours working on a class report, did everything you were supposed to do, and handed in an excellent assignment (in your opinion)? Your roommate, on the other hand, spent about five hours and put everything together at the last minute. You know, moreover, that he ignored half the requirements and never even ran his assignment through a spell-checker. A week later, your teacher returns the reports. You get a C grade and your roommate gets a B+. In all likelihood, you’ll feel that you’ve been treated unfairly relative to your roommate.

According to Figure 7.8, the Equity Theory, your reaction makes sense. The Equity Theory of motivation focuses on our perceptions of how fairly we’re treated relative to others. Applied to the work environment, this theory proposes that employees analyze their contributions or job inputs (hours worked, education, experience, work performance) and their rewards or job outcomes (salary, bonus, promotion, recognition). Then they create a contributions/rewards ratio and compare it to those of other people. The basis of comparison can be any one of the following:

• Someone in a similar position
• Someone holding a different position in the same organization
• Someone with a similar occupation
• Someone who shares certain characteristics (such as age, education, or level of experience)
• Oneself at another point in time

When individuals perceive that the ratio of their contributions to rewards is comparable to that of others, they perceive that they’re being treated fairly or equitably; when they perceive that the ratio is out of balance, they perceive inequity. Occasionally, people will perceive that they’re being treated better than others. More often, however, they conclude that others are being treated better (and that they themselves are being treated worse). This is what you concluded when you saw your grade in the previous example. You’ve calculated your ratio of contributions (hours worked, research and writing skills) to rewards (project grade), compared it to your roommate’s ratio, and concluded that the two ratios are out of balance.

What will an employee do if he or she perceives an inequity? The individual might try to bring the ratio into balance, either by decreasing inputs (working fewer hours, not taking on additional tasks) or by increasing outputs (asking for a raise). If this strategy fails, an employee might complain to a supervisor, transfer to another job, leave the organization, or rationalize the situation (e.g., deciding that the situation isn’t so bad after all). Equity theory advises managers to focus on treating workers fairly, especially in determining compensation, which is, naturally, a common basis of comparison.

Media Attributions

“Figure 7.5: Maslow’s Hierarchy of Needs” is adapted from Chapter 11: Motivating Employees in NSCC Fundamentals of Business, © Pamplin College of Business and Virginia Tech Libraries, licensed under CC BY-NC-SA.

“Figure 7.6: Herzberg’s Two-Factor theory: Poor hygiene factors will increase job dissatisfaction, while good motivators will increase satisfaction” is reused from Levels of management. © 2022 by Kindred Grey, licensed CC BY 4.0.

“Figure 7.7: Vroom’s Expectancy Theory” is reused from Expectancy theory. © 2022 by Kindred Grey, licensed CC BY 4.0.

“Figure 7.8: Equity Theory by John Stacey Adams” is reused from Equity theory, © 2022 by Kindred Grey, licensed CC BY 4.0, and includes “Scales of Justice” by Karen Arnold from Public Domain Pictures (CC0).

Image descriptions

Figure 7.5

A three-column diagram listing Maslow’s Hierarchy of Needs in the first column, and associating each level with specific with aspects of personal and professional fulfillment, as outlined in the table below.

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Figure 7.6

A pyramid showing the three levels of management and tasks associated with each level in bullet points. At the bottom of the pyramid is an area in beige for the First-line Managers, with four bullet points: Coordinate activities, supervise employees, report to middle managers, and be involved in day-to-day operations. The middle section of the pyramid is in orange with the heading Middle Managers, with the following four bullet points under the heading: Allocate resources, oversee first-line managers; report to top management; and develop and implement activities. The top section of the pyramid is in burnt orange and represents the Top Managers, with three bullet points associated with this section: Set objectives, scan the environment, and plan and make decisions.

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Figure 7.7

A flowchart illustrating the components of motivation. It consists of three rectangular boxes aligned horizontally, each outlined in orange. The boxes are separated by orange plus signs. At the top, the word “MOTIVATION” is centered in bold black uppercase letters. The first box on the left is labelled “EFFORT” with the text below stating, “Employees believe that effort will produce an acceptable performance.” The middle box is labelled “PERFORMANCE” with the text, “Employees believe that acceptable performance will earn them the desired reward.” The rightmost box is labelled “REWARD,” and it reads, “Employees value the offered reward.”

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Figure 7.8

A black silhouette of a balanced scale with “job inputs” above the left side and “job outcomes” on the right. The job inputs listed on the left side of the scale include education, experience, hours worked, work performance and the job outcomes listed on the right side of the scale include salary, promotions, and bonus recognition.

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