Managing Employee Motivation and Performance

Course Instructor
Md. Momin Uddin
BBA(Management), MBA(HRM), DU
Associate Professor
Department of Management Studies
Patuakhali Science and Technology University
Dumki, Patuakhali- 8602

1
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.
• The Importance of Motivation in the Workplace
• Determinants of Individual Performance
• Motivation—the desire to do the job.
• Ability—the capability to do the job.
• Work environment—the resources
to do the job.

2
Content Perspectives on Motivation

• Content Perspectives
• Approaches to motivation that try to answer the question, “What factors in
the workplace motivate people?”
• Content Perspectives of Motivation
• Maslow’s Hierarchy of Needs
• Aldefer’s ERG Theory
• Herzberg’s Two-Factor Theory
• McClelland’s Achievement,
Power, and Affiliation Needs

3
Content Perspectives on Motivation
(cont’d)
• The Need Hierarchy Approach
• Maslow’s Hierarchy of Needs
• People must, in a hierarchical order, satisfy five groups of needs:
•Physiological needs for basic survival and biological function.
•Security needs for a safe physical and emotional environment.
•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.
• Weakness of Maslow’s theory
• Five levels of need are not always present.
• Ordering or importance of needs is not always the same.
• Cultural differences.

4
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

Figure: 2
5
Content Perspectives on Motivation
(cont’d)
• The ERG Theory (Alderfer)
• People’s needs are grouped into three overlapping categories—existence,
relatedness, and growth.
• Maslow’s hierarchy is collapsed into three levels:
• Existence needs related to physiological and security needs.
• Relatedness needs that are similar to belongingness and esteem by others.
• Growth needs encompass needs for self-esteem and self-actualization.
• ERG theory assumes that:
• Multiple needs can be operative at one time (there is no absolute hierarchy of needs).
• If a need is unsatisfied, a person will regress to a lower-level need and pursue that need
(frustration-regression).

6
Content Perspectives on Motivation
(cont’d)
• 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.
• Hygiene factors (work environment) are on a separate continuum that ranges from
dissatisfaction to no dissatisfaction.
• Motivation is a two-step process:
• Ensuring that the hygiene factors are not deficient and not blocking
motivation.
• Giving employees the opportunity to experience motivational factors
through job enrichment.

7
 Motivation Factors The Two-
• Achievement
• Recognition
Factor
• The work itself Theory of
• Responsibility
• Advancement Motivatio
and growth n
Satisfaction No satisfaction

Hygiene Factors
• Supervisors
• Working conditions
• Interpersonal relations
• Pay and security
• Company policies and
administration

Dissatisfaction No dissatisfaction
Figure: 3
8
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 earlier task.
• 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.

9
Process Perspectives on Motivation

• Process Perspectives
• Approaches to motivation that 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
• Expectancy Theory
• Porter-Lawler Extension of Expectancy Theory
• Equity Theory
• Goal-Setting Theory

10
Process Perspectives on Motivation
(cont’d)
• Expectancy Theory
• Motivation depends on how much we want something and how likely we are
to get it.
• 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 that leads to a
desired outcome.
• 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.

11
Process Perspectives on Motivation
(cont’d)
• Elements of Expectancy Theory
• Effort-to-Performance Expectancy
• The employee’s perception of the probability that effort will lead to a high level of
performance.
• Performance-to-Outcome Expectancy
• The employee’s perception of the probability
that performance will lead to a specific
outcome—the consequence or reward
for behaviors in an organizational
setting.

12
Process Perspectives on Motivation
(cont’d)
• Elements of Expectancy Theory (cont’d)
• Valence
• An index of how much an individual values a particular outcome.
• It is the attractiveness of the outcome to the individual.
• Attractive outcomes have positive valences and unattractive
outcomes have negative valences.
• Outcomes to which an individual is indifferent have zero valences.
• For motivated behavior to occur:
• Both effort-to-performance expectancy and performance-to-outcome expectancy
probabilities must be greater than zero.
• The sum of the valences must be greater than zero.

13
Process Perspectives on Motivation
(cont’d)
• The Expectancy Model of Motivation
Outcome Valence

Environment Outcome Valence

Motivation Effort Performance Outcome Valence

Ability Outcome Valence

Outcome Valence

Figure: 4
14
Process Perspectives on Motivation
(cont’d)
• The 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 are outcomes set and awarded by external parties (e.g., pay and
promotions).
• Intrinsic rewards are outcomes that are internal to the individual (e.g., self-esteem and
feelings of accomplishment).

15
Process Perspectives on Motivation
(cont’d)
• The Porter-Lawler Extension of Expectancy Theory
Intrinsic
rewards
(outcomes)

Perceived
Performance Satisfaction
equity

Extrinsic
rewards
(outcomes)

Figure : 5
16
 Process Perspectives on Motivation
•(cont’d)
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 outcomes (other)

(self)
=
inputs (self) inputs (other)

17
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.

18
Process Perspectives on Motivation
(cont’d)
• Goal-Setting Theory
• Assumptions
• Behavior is a result of conscious goals and intentions.
• Setting goals influence 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.
• Goal specificity
• Clarity and precision of the goal.
• Goals vary in their ability to be
stated specifically.

19
Process Perspectives on
Motivation(cont’d)
• Characteristics of Goals (cont’d)
• 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.

20
 Process Perspectives on Motivation
•(cont’d)
The Expanded Goal-Setting Theory of Motivation

Goal Goal Organizational Intrinsic

difficulty acceptance support Rewards

Goal-Directed Satisfaction
Performance
Effort

Goal Goal Individual Extrinsic

specificity commitment abilities and Rewards
traits

Source: Reprinted by permission of the publisher, from Organizational

Dynamics, Autumn/1979, copyright © 1979, copyright © 1979 by
American Management Association, New York. All rights reserved.
(http://www.amanet.org)
Figure : 6
21
Reinforcement Perspectives
on Motivation
• 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.

22
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.

23
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.

24
Popular Motivational Strategies

• Empowerment and Participation

• Empowerment
• The process of enabling workers to set their own work goals, make decisions, and solve
problems within their sphere of influence.
• Participation
• The process of giving employees a voice in making decisions about their work.
• Areas of Participation for Employees
• Making decisions about their jobs.
• Decisions about administrative matters (e.g., work schedules).
• Participating in decision making about broader issues of product quality.

25
Popular Motivational Strategies
(cont’d)
• Techniques and Issues in Empowerment
• Using work teams
• Collections of employees empowered to plan, organize, direct, and control their work.
• Changing the overall method of organizing the firm by becoming more
decentralized.
• Conditions necessary for empowerment:
• Organization must be sincere about spreading power to lower levels.
• Organization must be committed to empowering workers.
• Organization must be systematic and patient in its efforts to empower workers.
• Organization must be prepared to increase its commitment to training.

26
Popular Motivational Strategies
(cont’d)
• New Forms of Working Arrangements
• Variable Work Schedules
• Compressed work schedule—Working a full forty-hour week in less than five days.
• Flexible work schedules (flextime)—Allowing employees to select, within broad
parameters, the hours they will work.
• Job sharing—When two part-time employees share one full-time job.
• Telecommuting—Allowing employees to spend
part of their time working off-site, usually
at home, by using e-mail, the Internet, and
other forms of information technology.

27
Using Reward Systems to
Motivate Performance
• Reward System
• The formal and informal mechanisms by which employee performance is
defined, evaluated, and rewarded.
• Effects of Organizational Rewards
• Effect of Rewards on Attitudes
• Satisfaction is influenced by how much is received and how much the person thinks should
have been received.
• Satisfaction is affected by comparison with others.
• The rewards of others are often misperceived.
• Overall job satisfaction is affected by employee satisfaction with intrinsic and extrinsic
rewards.

28
Using Reward Systems to
Motivate Performance (cont’d)
• Effects of Organizational Rewards (cont’d)
• Effect of Rewards on Behaviors
• Extrinsic rewards affect employee satisfaction and reduce turnover.
• Rewards influence patterns of attendance and absenteeism.
• Employees tend to work harder for rewards based on performance.
• Effect of Rewards on Motivation
• Employees will work harder when performance will be measured.
• Employees will work harder if
performance is closely followed
by rewards.

29
Using Reward Systems to
Motivate Performance (cont’d)
• Designing Effective Reward (cont’d)
• Reward system must meet an individual’s needs.
• Rewards should compare favorably with other organizations.
• Distribution of rewards must be perceived to be equitable.
• Reward system must recognize different needs.
• New Approaches
• Merit system
• A reward system whereby people get different pay raises at the end of the year depending
on their overall job performance.
• Incentive system
• A reward system whereby people get different pay amounts at each pay period in
proportion to what they do.

30
McGregor’s Theory X and Theory Y

Two sets of assumptions about the nature of

people. (how managers themselves see in
relation to others).
Theory X Assumptions:
• Average human beings have an inherent dislike
of work and will avoid it if they can.
• Because of this, most people must be coerced,
controlled, directed and threatened with
punishments to get them to put forth adequate
effort toward the achievement of organizational
objectives.
• Average human beings prefer to be directed,
wish to avoid responsibility, have relatively little
ambition and want security above all.
Copyright © by Houghton Mifflin Company. All rights
16–31
reserved.
Theory Y Assumptions
1. The expenditure of physical and mental effort in work is
as natural as play or rest.
2. External control and punishment are not the only means
for producing effort toward organizational objectives.
People will exercise self- direction and self control in the
service of objectives to which they are committed.
3. The degree of commitment to objectives is in proportion
to the size of the rewards associated with their
achievement.
4. Average human beings learn, under proper conditions,
not only to accepted responsibility but also to seek it.
5. Imagination, ingenuity and creativity are encouraged.
6. Intellectual potentialities are only partially utilized.
Theory X is pessimistic, static, and rigid, control is external,
imposed on subordinate by the superior.
Theory y is optimistic, dynamic, and flexible and the
integration of individual needs with organizational
demands.
Copyright © by Houghton Mifflin Company. All rights
16–32
reserved.