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CHAPTER 12. MOTIVATING EMPLOYEES: Achieving Superior Performance in the
Motivation (from Latin “movere” or “to move”) is a
hotly-desired, often overused and misunderstood
concept that lies deeply in the core of the human
nature. Hence, most of the chapter concentrates on
various theories developed predominantly in the field
of psychology and, later, applied to business.
Our major query in this chapter is to seek out possible
answers to a simple question, “Why do people act the
way they do?” The chapter gives an overview of what
motivation is, then describes two sets of theories of
motivation: (1) need-based and (2) process-based,
and concludes with the application of these theories
to job design, compensation, and other job-related
Motivation is an aim, desire, effort, enthusiasm, goal-seeking activities, impetus, etc. Its
importance to any organization (see Five Reasons on page 373) is apparent. But how is
motivation initiated? What triggers it? Where does it come from and why (or why not)? Please
go to the discussion board to share/learn some ideas/answers to these questions.
Motivation has two components:
the move (the physical action or behavior, such as being tardy to work, or being excited
to take up more responsibilities)  it’s the How of motivation, an easily observable act,
an outcome or surface level of motivation
The motive (the deeply-seated reasoning underlying specific behaviors/”moves”)  this
is the Why of motivation. This is our query.
Motivators could be classified as extrinsic and intrinsic. (p. 373). My job as a teacher has plenty
of intrinsic motivators: academic freedom, the joy of having a class learn a new concept, the
actual teaching, developing curricula, my personal constant learning and intellectual
motivation, etc. At the same time, extrinsic motivators are also important: salary, pension, time
off, status, autonomy, personal office, and so forth. The importance, however, of each of these
motivators is different for different teachers.
Before moving to explore motivational theories, review A Simple Model of Motivation in Figure
12.1. Think about any need you had/have (buying a car, a desire to make a better living, a
need to be in a relationship) and how it motivated certain behaviors in you, which led you (or
not) to fulfill the original need completely or partially.
The first group of theories (need-based or content
perspectives) believes that needs spark motivation. We
have already reviewed the Maslow’s Hierarchy of Needs.
Please learn the five levels of the hierarchy (starting from
the bottom), and how each level of needs could be
fulfilled by the employer) – Fig 12.2 on p. 375. Please also
see Net MBA’s webpage and a link to the Abraham
Maslow’s biography.
The second theory is McClelland’s Acquired Needs Theory. It directly relates to Maslow’s
Hierarchy but looks at needs as being learned, acquired, and not hereditary. Review an
excellent figure (Fig. 12.5, p. 380) that compares three theories of motivation: Maslow, Herzberg,
and McClelland.
Frederick Herzberg also related his Two-Factor (or Hygiene) Theory to Maslow’s hierarchy (pp.
379-380). Make sure to explore your textbook, the BusinessBalls and Net MBA websites to
understand how the theory explains satisfaction, dissatisfaction, and the neutral area, as well as
the relationship between Maslow’s and Herzberg’s theories.
The second group of theories argues that motivation comes from the thought process that goes
through people’s minds as they act. These are the Process Perspectives (p. 381), which include:
Vroom’s Expectancy Theory
Equity Theory
Goal-Setting Theory
The expectancy theory (pp. 383-384) could be described by a simple
formula: E  P  R. The thought process is as follows: if I put an extra
effort (E) into a project, my performance (P) will be improved, which
will allow me to obtain a certain reward (R). Your text book also
defines the three elements of the theory: expectancy, instrumentality,
and valence.
At first glance, this theory seems most applicable to a traditionalattitude work situation where the level of employee’s motivation
depends on the importance of the final reward/achieving a goal, etc.
However, it could equally apply to any situation where someone does something because they
expect a certain outcome. For example, I recycle paper because I think it's important to
conserve resources and take a stand on environmental issues (valence); I think that the more
effort I put into recycling, the more paper I will recycle (expectancy); and I think that the more
paper I recycle, less resources will be used (instrumentality).
Thus, this theory of motivation is not about self-interest in rewards but about the associations
people make towards expected outcomes and the contribution they feel they can make
towards those outcomes. You can learn more information about Victor Vroom and the
expectancy theory by visiting Wikipedia.
The equity theory (p. 381) describes the employees’ thought process (remember, these are the
process theories!) as a quest to whether they perceive to be treated/compensated fairly. There
are three levels of equity-related thought:
1. Personal: what I perceive I am worth vs. the actual compensation package ($ + nonmonetary) I receive.
2. Internal: what I think I deserve to get paid based on my knowledge/skills/experience vs.
how I think my colleagues in the same/similar positions are getting compensated.
3. External: my compensation vs. the compensation for an equal position in a different
If an employee perceives inequity to exist in any of the above scenarios, he/she will become
unmotivated and might fight this inequity in various ways (see Table 12.1, p. 383).
The goal-setting theory is described on p. 386. We have already discussed this theory in chapter
5 when we introduced the concept of MBO. You can learn more about this theory by visiting or Time Management Guide.
The third group of theories (which include just one theory) describes motivation in relationship to
employees’ behavior. It is known as the reinforcement theory (p. 391). The idea includes four
types of reinforcements (pp. 391-393): positive , negative , extinction, and punishment.
Based on all of the theories, job satisfaction is crucial to motivating employees. If workers enjoy
their jobs, are challenged, interested in what they are doing, then their motivation will be
increased and sustained. The process of job design (p. 387) uses various techniques to create
more satisfying and challenging jobs. Some of these techniques include job enlargement and
job enrichment (see pp. 387-388).
Overall, a manager can design more motivational jobs if she implements the job characteristics
model (p. 389-390 and also Fig. 12.8).
The model includes five core job
Skill variety
Task identity
Task significance
Autonomy, and
All of these are defined on pp. 389390. Higher level for each of these
characteristics leads employees to
experience three psychological
states of (1) meaningfulness of work,
(2) responsibility for work outcomes,
and (3) the knowledge of actual
results of the work. As workers engage in these behaviors, the management will see some
tangible outcomes of increased motivation, performance, job satisfaction, and decreased
absenteeism and turnover.
The last part of chapter 12 applies theories of motivation to developing incentive compensation
plans (both monetary and nonmonetary rewards) to motivate workers. Some of the tools
mentioned in the book include profit sharing, gainsharing, stock options, and so forth (see p. 395396).