MODULE 2:MOTIVATION AND REWARD SYSTEMS

5. Motivation

What is Motivation?

It is the internal condition that activates behavior and gives it direction; energizes and directs goal-oriented behavior

Job performance is a given requirement in any organization. It is possible, however, if the following conditions are met:1. THE CAPACITY TO PERFORM2. THE OPPORTUNITY TO PERFORM3. THE WILLINGNESS TO PERFORM

Key Elements of Motivation Intensity Direction Persistence

THEORIES OF MOTIVATION

CONTENT theories are those that focus on analyzing the wants and needs of an individual. The four better known content theories are the following:

1. Hierarchy of Needs Theory by Abraham Maslow

2. ERG Theory of Clayton Alderfer3. Acquired Needs Theory of David L.

McClelland4. Two-Factor Theory of Frederick Herzberg

CONTENT.1:Abraham Maslow’s Hierarchy of NeedsAbraham Maslow forwarded the idea that human beings possess a hierarchy of five needs such that as each need is substantially satisfied, the next need becomes dominant. A brief description of the needs is provided as follow:

1. Physiological needs – which include, hunger, thirst, shelter, sex, and other bodily needs.

2. Safety needs – which include security and protection from physical and emotional harm.

3. Social needs – which include affection, belongingness, acceptance, and friendship.

4. Esteem needs- which include internal esteem factors such as self-respect, autonomy, and achievement, and external esteem factors such as status, recognition, and attention.

5. Self-actualization – refers to the drive to become what one is capable of becoming which includes growth, achieving one’s potential, and self-fulfillment.

CONTENT.2: ERG Theory

The ERG theory is a need hierarchy theory of motivation that was developed by Clayton Alderfer. He believed that in motivating people, we are confronted by three sets of needs: (E) EXISTENCE, (R) RELATEDNESS, and (G) GROWTH.1. EXISTENCE – this refers to needs satisfied by such

factors as food, air, water, pay, and working conditions.

2. RELATEDNESS – this refers to the needs satisfied by meaningful social and interpersonal relationships.

3. GROWTH – this refers to the needs satisfied by an individual making creative or productive contributions.

CONTENT.3: Acquired Needs TheoryAcquired needs theory was developed as a result of a research made by David McClelland and his associates. They found out that managers are motivated by three fundamental needs which may be briefly described as follows:1. NEED FOR ACHIEVEMENT – this refers to the desire to

do something better or more efficiently, to solve problems, or to master complex tasks.

2. NEED FOR AFFILIATION – which refers to the desire to establish and maintain friendly and warm relations with others.

3. NEED FOR POWER – which refers to the desire to control others, to influence their behavior, or to be responsible for others.

CONTENT.4: Two Factor TheoryFrederick Hezberg developed his two-factor theory that identifies job context as a source of job dissatisfaction and job content as the source of job satisfaction. The job content of work setting relates more to the environment in which people work. The factors associated with job context are called hygiene factors which include the following:1. ORGANIZATIONAL POLICIES2. QUALITY OF SUPERVISION3. WORKING CONDITIONS4. SALARY5. RELATIONSHIP WITH PEERS6. RELATIONSHIP WITH SUBORDINATES7. STATUS8. SECURITY

THEORIES OF MOTIVATION

PROCESS theories explain how people act in response to the wants and needs that they have. Classified under process theories are the following:1. Expectancy Theory of Victor

Vroom2. Equity Theory of J. Stacey Adams3. Goal Setting Theory of Edwin A.

Locke

PROCESS.1: Expectancy TheoryOne of the process theories refer to the expectancy theory that was developed by Victor Vroom. This theory sees people as choosing a course of action according to what they anticipate will give them the greatest rewards.Vroom elaborated by explaining that motivation is a product of the following factors:1. VALENCE – how much one wants a reward.2. EXPECTANCY – one’s estimate of the probability

that effort will result in successful performance.3. INSTRUMENTALITY – one’s estimate that

performance will result in receiving the reward.

PROCESS.2: Equity Theory

Equity theory may be defined as a theory that individuals compare job inputs and outcomes with those of others and then respond to eliminate inequities.Equity theory assumes that employees are motivated by a desire to be equitably treated at work. Equity exists when employees perceive that the ratios of their efforts to their rewards are equivalent to the ratios of other employees. Inequity exists when these ratios are not equivalent.Inequity leads to the experience of tension, and tension motivates a person to act in a manner to resolve the inequity. The person, however, will be confronted with any of the two types of inequity:1. OVER REWARDED2. UNDER REWARDED

Employees who feel over rewarded will think there is an imbalance in their relationship with their employer. They will seek to restore the balance through any of the following:1. THEY MIGHT WORK HARDER2. THEY MIGHT DISCOUNT THE VALUE

OF THE REWARDS3. THEY COULD TRY TO CONVINCE

OTHER EMPLOYEES TO ASK FOR MORE REWARDS

4. THEY MIGHT CHOOSE SOMEONE ELSE FOR COMPARISON PURPOSES

When employees feel under rewarded, they will seek to reduce their feelings of inequity through any of the following:1. THEY MIGHT LOWER THE QUALITY OR

QUANTITY OF THEIR PRODUCTIVITY2. THEY COULD INFLATE THE PERCEIVED

VALUE OF THE REWARDS PERCEIVED3. THEY COULD FIND SOMEONE ELSE TO

COMPARE THEMSELVES4. THEY COULD BARGAIN FOR MORE

REWARDS5. THEY MIGHT QUIT

PROCESS.3: Goal Setting Theory• Goal Setting Theory may be defined as the

theory that specific and difficult goals, with feedback lead to higher performance.

• Goal Setting theory is based on the premise that behavior is regulated by values and goals. A goal is the specific target that an individual is trying to achieve.

• It was Edwin A. Locke and his associates who developed a comprehensive framework linking goals to performance.

Their findings about goals include the following:

1. Specific goals lead to a higher performance then generalized goals

2. Performance generally increases in direct proportion to goal difficulty.

3. For goals to improve performance, they must be accepted by the workers.

4. Goals are more effective when they are used to evaluate performance

5. Goals should be linked to feedback.

6. Appraising and Rewarding

Pay is an important feature, because it is the main reason why people work.

 In particular, pay provides employees with the opportunity to meet both lower-level maintenance and upper-level growth and achievement needs.

The challenge for managers is to administer rewards properly.

Rewards include monetary and non-monetary.

Rewards Rewards are used by managers and employers as

motivators for their employees to achieve their personal goals as well as the goals of the company they are working in. Rewards may vary depending on the need of the employee and the capability of the company/employer and may range from salaries to promotions and others.

Some rewards may be given to all individuals by virtue of their employment (Universal or across the board rewards). Other rewards may be given by function of seniority while many are given via results of job performance.

This results are taken from: Feedbacks Job evaluation

Types of Rewards

Intrinsic Extrinsic self administered by

the person. It provides a feeling of satisfaction or gratification Completion Achievement Autonomy Personal growth

Initiated from outside the person. Financial rewards:

salaries and wages Interpersonal rewards Promotions

Reinforcement Theory

A reinforcement is different from a reward in that a reward is perceived to be desirable and given after the performance. A reinforcement can be both positive and negative Positive reinforcement- added stimulus that strengthens

the probability of a behavioral response. Negative reinforcement- increase in frequency of a

response following the removal of the negative reinforce immediately after the response.

Punishment- presenting an uncomfortable consequence for a particular behavior response. Managers apply punishment by either application or removal.

Extinction- Decline in response rate because of nonreinforcement.

REINFORCEMENT SCHEDULES:1. Continuous- Reinforcer follows every

response2. Fixed Interval- Response after specific

time period is reinforced.3. Variable interval- Response after varying

periods of time is reinforced.4. Fixed ratio- A fixed number of responses

must occur before reinforcement.5. Variable Ratio- A varying number of

responses must occur before reinforcement.

Job Analysis

Find out the relative worth of the job Getting information about the current or

proposed duties and requirements of a position to determine the most appropriate function

Collecting of information about the duties and responsibilities, necessary skills, outcomes, and work environment

Focuses on work behaviors, tasks, and outcomes

Data can be gathered through observation, interviews, work sampling, and questionnaires

Job Description

Describing the duties performed, the skills training and experience required, the responsibilities involved, the contribution under which the job is done and other relations of the job to the other jobs in the organization

Job Evaluation

Assessment of the relative worth of job on the basis of a consistent set of job factors and personal factors such as qualifications and skills required

Different Approaches to Reward System Skill-Based pay

Paying an employee at a rate based on their ability to develop and apply personal skills

Advantages: Organization increases its flexibility. Organization may need fewer distinct job classifications. Fewer employees are needed Organization may experience reduction in turnovers and

absenteeism Broadbanding

A pay system that reduces actual number of pay grades to a relatively few broadly based pay grades.

Places emphasis on titles, grades and job description

Concierge Services Basically a butler system wherein

employees hire them for help in their busy schedules

Team-based Rewards Part-time Benefits Gain Sharing

Provide employees with a share of the financial benefits the organization receives from improved operating efficiencies and effectiveness.

Employee Stock ownership Plans Companies make a contribution of stock

to employees

There are three important organizational concerns influenced by rewards:

Turnover and AbsenteeismJob PerformanceOrganizational Commitment