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on 7 December 2013

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Transcript of Motivation

Key Outcomes:
Understand what
is and analyse
needs and
Discuss the motivational theories of
and their relevance to business today
Evaluate different forms of
financial motivation
and their impact on motivation
Assess the role of
methods of motivation and evaluate their impact
Apply the content theories of
and the process theories of
factors that stimulate people to take actions that lead to achieving a goal.

Intrinsic motivation:
Comes from the satisfaction derived from working on and completing a task.

Extrinsic motivation:
Comes from external rewards associated with working on a task, for example pay and other benefits.
Key terms
Unmotivated or demotivated staff will not perform effectively, offering only the minimum of what is expected. Motivation levels have a direct impact on productivity levels and the competitiveness of the business .
Highly motivated workers have high productivity and this reduces unit costs.
Motivated staff will be keen to stay with the firm, reducing costs of labour turnover. They will be more likely to offer useful suggestions and to contribute in ways other than contractual obligations. They often actively seek promotion and responsibility. In contrast, some indicators of poor staff motivation are shown to the right.
Some indicators of poor motivation
The importance of motivation
Well-motivated workers will help an organisation achieve its objectives as cost effectively as possible. Motivated workers will also be trying to reach their own personal goals by satisfying their own needs. Employers need to be aware of extrinsic needs, such as pay, which can provide motivation even if the job itself does not. Intrinsic motivation stems from the nature of the job itself. For example, a large part of my motivation as an IB Business and Management teacher comes from the satisfaction of helping my students grow as learners and achieve stunning results all the way through their two years with me.
Content theories of motivation explain the
actual factors that motivate people
; i.e.
motivates workers. Herzberg, for example, looked at hygiene factors and motivators, whilst McClelland studied the need for achievement, affiliation and power.
Content theories of motivation
Taylor & Ford: Scientific Management
Taylor and Scientific Management
Specialisation and division of labour lead to greater levels of productivity. Taylor introduced a
piece-rate payment system
to link pay with productivity levels.
Select workers to perform a task
Observe them performing the task and note the key elements of it
Record the time taken to do each part of the task
Identify the quickest method recorded
Train all workers in the quickest method and do not allow them to make any changes to it
Supervise workers to ensure that this 'best way' is being carried out and time them to check that the set time is not being exceeded
Pay workers on the basis of results
How to improve worker productivity :
Reaching one's full potential; e.g. challenging work that stretches the individual - this will give a sense of achievement. Opportunities to develop and apply new skills will increase potential.
Esteem needs:
Respect from others, status and recognition of achievement. Give employees recognition for work done well - status, advancement and responsibility will gain the respect of others.
Social needs:
Trust, acceptance, friendship, belonging to the group and social facilities. Working in teams or groups and ensuring good communication to make workers feel involved.
Safety needs:
Protection from threats, job security, health and safety at work. A contract of employment with some job security - a structured organisation that gives clear lines of authority to reduce uncertainty. Ensuring health and safety conditions are met.
Physical needs:
Food, shelter, water, rest. Income from employment high enough to meet essential needs.
The hierarchy of human needs
A motivation theory that outlines the five levels of needs, from the requirement to satisfy basic physiological needs through to self-actualisation. Maslow argued that until a lower order need is met, people cannot progress onto the next level of needs.
Maslow's Hierarchy of Human Needs
A sense of fulfilment reached by feeling enriched and developed by what one has learned and achieved.
Maslow: Psychology 101
Limitations of Maslow's theory:
Not everyone has the same needs as is assumed by the hierarchy
In practice it can be very difficult to identify the degree to which each need has been met and which level a worker is 'on'
Money is necessary to satisfy physical needs, yet it might also play a role in satisfying other levels of needs such as status and esteem
Self-actualisation is never permanently achieved - as some observers of the hierarchy have suggested. Jobs must continually offer challenges and opportunities for fulfilment otherwise regression will occur.
McGregor's Theory X and Theory Y
A theory of motivation based on
management perceptions of worker attitudes
in the workplace.
Theory X
managers are authoritarian and assume that employees need to be supervised.
Theory Y
managers assume that employees seek recognition and praise for their contributions and achievements.

Theory X:
McGregor's term for describing managers that perceive their employees in a
way; i.e., subordinates need constant supervision, prefer to be told what to do, avoid work if they can, and do not seek any responsibility.

Theory Y:
Is an
management stance towards worker attitudes; Theory Y managers believe that employees do have initiative, want praise and recognition for their achievements, and like taking responsibility at work .
Summary of Theory X and Theory Y management attitudes to staff
McGregor's Theory X and Theory Y:
A 30 second explanantion
Herzberg and the 'Two Factor Theory'
Herzberg's Two Factor Theory looked at the factors that motivate employees, namely
and maintenance (
) factors.

Hygiene factors:
Parts of a job that do
increase job satisfaction but help to
remove dissatisfaction
, such as reasonable wages and working conditions.

Factors that increase
job satisfaction and motivation
levels, such as praise, recognition and responsibility.
Consequences of Herzberg's Theory:
Pay and working conditions can be improved and these will help to remove dissatisfaction about work; but they will not, on their own, provide conditions for motivation to exist. Herzberg argued that it was not possible to encourage someone to do a job by paying them - he called this
. However, movement does not mean that someone wants to do the job - that would require motivation. Motivation to do the job and to do it well would only exist if motivators were in place.
Herzberg did not claim that pay did not matter, but that it moves people to do a job and does not motivate them to do it well.
Consequences of Herzberg's Theory:
The motivators need to be in place for workers to be prepared to work willingly and to always give of their best. Herzberg suggested that motivators could be provided by adopting the principles of
job enrichment
- which aims to use the full capabilities of workers by giving them the opportunity to do more challenging and fulfilling work.

There are
three main features of job enrichment:

Assign workers complete units of work
Provide feedback on performance
Give workers a range of tasks
Consequences of Herzberg's Theory:
A business could offer higher pay, improving working conditions and less heavy-handed supervision of work. These would all help to remove dissatisfaction, but they would all quickly be taken for granted. If work is not interesting, rewarding or challenging, then workers will not be satisfied or will not be motivated to offer their full potential whatever the pay level offered them.
Management can remove all causes of dissatisfaction from a particular job, and workers can still be unmotivated.
Herzberg's theory explained
Causes of satisfaction and dissatisfaction at work
Motivators are those factors that increase job satisfaction, and hygiene factors need to be addressed by management to avoid workers becoming dissatisfied in their jobs.
Evaluation of Herzberg's work
is now much more widespread, with whole units of work being delegated to these groups.
Workers tend to be much
more responsible for the quality of their own work
rather than being closely supervised by a quality-controlling inspectorate.
Most firms are continually looking for ways to improve
effective communication
, and group meetings allowing two-way communication are often favoured.
Mayo - the Human Relations Theories
Changes in working conditions and financial rewards have little or no effect on productivity
When management consult with workers and take an interest in their work, then motivation is improved
Working in teams and developing a team spirit can improve productivity
When some control over their own working lives is given to workers, such as deciding when to take breaks, there is a positive motivational effect
Groups can establish their own targets or norms and these can be greatly influenced by the informal leaders of the group
Mayo's Hawthorne Effect
found that workers are most motivated and productive when they are able to have some social interaction with their fellow workers and management takes an interest in their well-being.
Since May's research, there has been a growing trend towards giving workers more of a role in business decision-making - this is called
Personnel departments
were established to try and put the Hawthorne effect into practice.
group working
can be applied in many types of modern business organisations and these offer the greatest opportunities for workers and firms to benefit from the Hawthorne effect.
The idea of involving workers, taking an interest in their welfare and finding out their individual goals has opened up new fields of research for
industrial psychologists
development of the 'people' side
of the business has taken industry away from the engineer-focussed and purely money-motivated views of Taylor.
The Hawthorne Experiments
Conclusions of Mayo's work:
Evaluation of Mayo's work for today's organisations:
McClelland - Motivational Needs Theory
The mix of motivational needs characterise a person's or manager's behaviour, both in terms of what motivates them and how they believe other people should be motivated.

McClelland states that there are three types of motivational need:

motivation (
motivation (
motivation (
power motivation
A person with this dominant need is 'authority motivated'. The desire to control others is a powerful motivating force - the need to be influential, effective and to make an impact. There is a strong leadership instinct when authority is gained over others, it brings personal status and prestige.
McClelland's three types of motivation:
achievement motivation
A person with the strong motivational need for achievement will seek to reach realistic and challenging goals and job advancement. There is a constant need for feedback regarding progress and achievement and the need fore a sense of accomplishment. Research has suggested that this result-driven attitude is almost always a common characteristic of successful business people and entrepreneurs.
affiliation motivation
The person with need for affiliation as the strongest motivator has a need for friendly relationships and is motivated towards interaction with other people. These people tend to be good team members - there is a need to be liked and popular and to be held in a high regard.
Two Process Theories:
Vroom & Adams
Process theories
of motivation look at why people behave in a certain manner and how motivation can be maintained or stimulated. These theories look at what people think about when deciding whether or not to put in the effort to complete a task.
Adams and Equity Theory
Adam's Equity Theory is a theory of motivation that states that people will be motivated when they perceive that they are being treated fairly; the idea that employees try to maintain equity between inputs and outputs compared to others in similar positions.
Vroom and Expectancy Theory
In Vroom's Expectancy Theory individuals choose to behave in ways that they believe will lead to outcomes they value. Individuals will have different sets of goals.

Motivation in Vroom's Expectancy Theory: Individuals have different sets of goals and can be motivated if they believe that:

There is a positive link between effort and performance
Favourable performance will result in a desirable reward
The reward will satisfy an important need
The desire to satisfy the need is strong enough to make the work effort worthwhile
In Adams' Equity Theory people become demotivated, seek change and improvement, and/or reduce input whenever they feel their inputs are not being fairly rewarded. Fairness is based on perceived market norms.
- the depth of the want of an employee for an extrinsic reward, such as money, or an intrinsic reward such as satisfaction.
- the degree to which people believe that putting effort into work will lead to a given level of performance.
- the confidence of employees that they will actually get what they desire regardless of what has been promised by the manager.
Vroom's Expectancy Theory - 3 beliefs:
Motivation in Practice
Payment or Financial Rewards Systems
The most common payment systems are:

Hourly wage rate :
payment made to a worker for each hour worked.
Piece rate:
a payment to a worker fro each unit produced.
annual income that is usually paid on a monthly basis.
a payment to a sales person for each sale made.
Performance-related pay:
a bonus scheme to reward staff for above-average work performance.
Profit-related pay:
a bonus for staff based on the profits of the business - usually paid as a proportion of basic salary.
Fringe benefits:
any financial extras beyond the regular pay cheque, such as health insurance, life insurance, paid vacation and/or retirement.
Employee share ownership schemes:
employee benefit scheme intended to motivate employees by giving them a stake in the firm's success through equity participation.
Advantages and Disadvantages:

Gives security of income
Gives status compared to time rate or piece rate payment systems
Aids in costing (salaries won't vary for one year)
Is suitable for jobs where output isn't measurable
Is suitable for management positions where staff are expected to put in extra time to complete tasks and assignments

Income is not
related to effort and productivity levels
It may lead to complacency of the salary earner
Regular appraisal may be needed to assess whether an individual should move up a salary band (can be an advantage if positive appraisal)
Piece Rate Systems
Advantages and Disadvantages:

Encourages greater effort and faster working
The labour cost for each unit is determined in advance and helps set a price for the product

It requires output to be measured and standardised (which is difficult if each product is different)
It may lead to falling quality and safety levels as workers rush to complete units
Workers may settle for a certain pay level and won't be motivated to produce more than a certain level
It provides little security over pay level
Performance-Related Pay
Advantages and Disadvantages:

Staff are motivated to improve performance if they are seeking to increase financial rewards
Target setting can help to give purpose and direction to the work of an individual
Annual appraisal offers the opportunity for feedback on the performance of an individual

It can fail to motivate if staff are not driven by the need to earn financial rewards
Team spirit can be damaged by the rivalry generated
Claims of manager favouritism may undermine relationships
Less autonomy for workers as they need to conform to the system that generates bonuses
Warren Buffet on excessive CEO pay
Non-Financial Methods of Motivation
The main non-financial motivators:
Why financial motivation so often fails
It is now widely recognised that businesses cannot use money alone to create the necessary motivation for employees to complete jobs efficiently.

Non-financial motivators include:
job enlargement
job enrichment
Job enlargement:
attempting to increase the scope of a job by broadening or deepening the tasks undertaken

Job enrichment:
aims to use the full capabilities of workers by giving them the opportunity to do more challenging and fulfilling work.

Team working:
production is organised so that groups of workers undertake complete units of work

a non-financial motivator which involves a line manager giving her subordinates some autonomy in their job and the authority to make various decisions
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