Sunday, August 23, 2009

Employee Motivation Theories and Types

Chapter 1: Introduction to Employee Motivation

1.1. Introduction

An issue which usually generates a great deal of attention from most managers, administrators and those involved in Human Resources Management is the issue of how to successfully motivate employee. While it is true that aspects like staff recruitment, controlling, managing, leading, and many more are of great importance to the success of an organization, Employee Motivation is generally considered a core element in running a successful business.

1.2. Statement of the Problem

This paper attempts to discover the most important theories and approaches behind employee motivation, present different types of motivation, discuss their importance and provide recommendations and solutions to solving problems of de-motivated or unmotivated employees.

1.3. The Nature and Importance of Motivation

Managers and scholars alike have long been inspired in attempting to find out why some employees tend to work harder than others. The study of motivation helps managers understand this variance in performance. Furthermore, knowledge of what motivates people allows managers to take ‘constructive steps’ to improve their employees’ work performance[1].

Before understanding the different types of motivation, we need to examine closely the nature of motivation. The term motivation derives from the Latin word movere, meaning, ‘to move’. This means that no one can understand a person’s motivation until that person ‘behaves or literally moves’[2]. Kreitner describes motivation as ‘the psychological process that gives behavior purpose and direction’, while Moorhead and Griffin explain motivation as ‘the set of forces that causes people to engage in one behavior rather than some alternative behavior’[3].

Employees are essentially the most important aspect of an organization. Managers strive to motivate their employees so that they are willing to perform at their highest levels. When employees work hard, come to work regularly and continue making positive contributions to the organization, the business will be able to cut costs and yield more profit, both of which are the ultimate goals of any organization. On the contrary, unmotivated employees will mean the organization will have people that are not willing to do well in the jobs or have to hire more people to do different jobs, which contribute to higher operating costs and a reduction in profit.

According to an article entitled ‘Need-based Perspectives on Motivation’ by Moorhead and Griffin, job performance depends on three main factors: Motivation, Ability and Environment. In order for an employee to reach a higher level of performance, he/she must ‘want to do the job’ (motivation), ‘be able to do the job’ (ability), and ‘must have the materials, resources, and equipment to do the job’ (environment).For this reason, the following relationship can be established:

Performance = Motivation + Ability + Environment

Deficiency in any one of these factors will result in a lower level of job performance. Managers always need to ensure that these three conditions are met[4].

Of all the three factors, it is generally accepted that motivation is the most difficult factor to manage. This is mainly due to the fact that human’s attitude/behavior is full of complexities and thus difficult to manage. As for the other two factors, an employee has been recruited with the awareness that he/she has the skills and capacity needed to perform the tasks as well as the fact that resources are readily available. If the manager feels that the employee lacks training of some sort, he/she can be sent to training programs to learn those skills. If the person is not suitable for the level, he/she can be directed to work at lower jobs. On the other hand, if resources are not available, i.e. the environment factor, the manager can take action to ensure that they become available. For example, if an employee needs a photocopier, he/she can formulate request to the management team and ask for one. For this reason, it is quite clear that the most challenging job for every employer is how to motivate their employees to strive their best to work for the organization.

Now that we have understood the nature and importance of motivation, we can turn our attention to the theories and approaches behind motivating employees, the main topic of discussion of our next chapter.

1.4. Definition of Key Terms

Following are several key terms that we believe are very important in order to fully comprehend the theories and approaches behind employee motivation.

Motivation - derives from the Latin word movere, meaning, ‘to move’.

1. The internal condition that activates behavior and gives it direction[5].

2. The psychological process that gives behavior purpose and direction[6].

3. The set of forces that causes people to engage in one behavior rather than some alternative behavior[7].

Needs - something that is necessary for humans to live a healthy life. It can be objective and physical (food and water), or subjective and psychological (need for self-esteem)[8].

Satisfaction - The good feeling that you have when you have achieved something or when something that you wanted to happen does happen[9].

Dissatisfaction - The feeling that you are not pleased or satisfied[10].

Incentives - Any factor (financial or non-financial) that enables or motivates a particular course of action[11].

Job rotation - periodically move people from one specialized job to another for neutralizing job boredom.

Job enlargement - Combining two or more specialized tasks into a single job to make jobs more challenging.

Job enrichment - Redesign a job to increase its motivating potential by introducing planning and decision-making responsibility.

Extrinsic reward - external outcomes granted to someone by another person or by organizational system, such as money, promotions etc.

Intrinsic reward - derives internally from individuals that can be experienced through their work, such as the feelings of competency, sense of accomplishment etc.

Chapter 2: Review of Related Literature

2.1. Motivation Theories

2.1.1. Historical Perspectives of Motivation

a. Early Views of Motivation

One early view of motivation derives from the concept of Hedonism – the idea ‘that people seek pleasure and comfort and try to avoid pain and discomfort’[12]. This philosophy, which argues that pleasure is the ‘ultimate importance and is the most important pursuit of humanity’, dominated and shaped early thinking of human motivation[13]. Even if this theory seems reasonable as far as it applies to the current society, there are still many kinds of behavior that it cannot explain. For instance, why do recreational athletes train themselves very hard willingly and regularly while hedonism suggests that people are always seeking to relax? And why do volunteers spend their time working untiringly to collect money for charity events? As experts eventually realized that the concept of hedonism is very limited and does not adequately explain the view of human behavior, other perspectives of motivation stood out[14].

b. The Scientific Management Approach

The Scientific Management Approach strongly emphasizes the belief that people are motivated by money. Frederick W. Taylor, the supporter of this approach, assumed that employees are ‘economically motivated’ and will work hard to earn as much money as they can[15].

Researchers, however, soon found out that human behavior is far more complex and cannot simply be explained by the assumption of the scientific management theory.

c. The Human Relations Approach

The human relations approach suggested that employees are motivated by social factors other than money, in other words, they respond to their social environment at work. Job satisfaction is assumed to be the crucial motive in improving employees’ performance. The development of Maslow's hierarchy of needs theory, which is our next main topic of discussion, has played a vital role in helping scientists answer questions related to human behavior[16].

2.1.2. Need Theories of Motivation

Need theories represent the ‘starting point’ for most contemporary thought on motivation. These theories argue that humans are motivated by ‘deficiencies’ in one or more important needs or needs categories. Human beings then try harder to satisfy those needs and thus become motivated. The two best-known need theories are Maslow’s hierarchy of needs and Alderfer’s ERG theory.

a. Maslow’s Hierarchy of Needs Theory

The hierarchy of needs, developed by Abraham Maslow in the 1940s, was arguably the most famous need theory – famous probably because it was so straightforward and ‘intuitively appealing’ to those interested in work behavior[17].

Maslow, who labeled human beings as ‘wanting’ animals, asserted that people have an ‘innate’ desire to satisfy a predictable five-step hierarchy of needs. These needs have been categorized in an order of importance, with the most basic needs at the foundation of the hierarchy[18]. The three sets of needs at the bottom of the hierarchy can be grouped as ‘deficiency needs’, which must be satisfied in order for a person to be comfortable, while the top two sets can be named ‘growth needs’, which focus on the growth and development of an individual.

Having looked at the basic concepts of Maslow’s hierarchy of needs theory, we are going to examine each one of the five needs very closely.

Physiological Needs: these needs refer to the desire to fulfill physical satisfactions such as water, sleep, food, air and sex. These needs are considered the most important needs because without them, human beings cannot survive. No other needs would be of any importance if physiological needs have not been satisfied[19].

Safety Needs: Maslow’s theory states that human beings strive to meet these needs once the physiological needs are satisfied. It is about individual safety - being away from evils and threats. It is also believed that most modern employees are able to fulfill these needs through earning an income or depending on unemployment benefits. Maslow asserts that individuals who have ‘prolonged deprivation of physiological and safety needs’ may become ‘seriously maladjusted’ people[20].

Love/Belongingness Needs: Once the physiological and safety needs are satisfied, human beings tend to focus on the needs for love and affection. People endeavor to obtain a sense of belonging with others. This category of needs is a very powerful motivator of human behavior.[21]

Esteem Needs: A person who wishes to be a highly valued individual in the society always desires for high self-esteem. These self-esteem needs derive from self-respect, which in turn comes from being accepted and respected by the society. It is essential for those who are considered the people to help achieve an organization’s targeted objectives to be able to fulfill this category of needs. Once again, according to Maslow, esteem needs to be met for an individual to move to higher-level needs.

Self actualization Needs: The fifth and final category at the top of Maslow’s hierarchy of needs are the needs for self actualization. This means ‘realizing our full potential and becoming all that we can be’[22]. In other words, it involves to the need to become more and more what we are, and to become everything that we are capable of becoming, which makes self-actualization an open-ended category.

Achieving all of the above characteristics is almost an impossible task. After all, it is still debatable whether an organization should have more or fewer self-actualized managers. On the one hand, this type of managers will play an important role in breaking barriers to creativity and providing new initiatives as to where the organization should be heading. On the other hand, too many ‘unconventional nonconformists’, i.e. self-actualized individuals, can also provoke chaos in one organization[23]. Figure 2.1 summarizes the categories of needs that we discussed above.

b. Alderfer’s ERG Theory

Another very important theory of motivation is the ERG Theory, which was developed by Yale psychologist Clayton Alderfer. The ERG Theory – E stands for Existence Needs, R for Relatedness Needs and G for Growth needs – has many aspects that are very similar to those of Maslow’s hierarchy of needs, although there are still a number of very important differences between the two[24].

For Alderfer’s ERG Theory, The Existence category is similar to Maslow’s Physiological and Safety needs, while Maslow’s Love and Self Esteem needs are placed in the Relatedness needs category. Finally, the Growth category is similar to the self-actualization and self-esteem needs of Maslow’s theory[25].

The ERG Theory, in contrast to the Hierarchy needs theory, emphasizes that more than one kind of need may motivate a person at the same time. Also, an even more important difference between the two theories is that the ERG includes two main components: The Satisfaction-Progression Component and The Frustration-Regression Component[26].

The satisfaction-progression component explains that after an individual has satisfied one category of needs, he then moves on to the next level. This concept agrees with that of hierarchy of needs’ theory. The Frustration-Regression Component, on the other hand, argues that if an employee is not able to satisfy a higher level of needs, he becomes ‘frustrated’ and eventually ‘regresses’ to the previously satisfied level[27].

To illustrate, we are going to look at an example. Nick Hernandez has satisfied his basic needs at the relatedness level, which means he has a lot of friends and social relationships. As a result, he is now trying to satisfy his growth needs through doing his best to progress to a higher position in his career. However, due to certain organizational constraints (e.g. few challenging jobs, few chances to demonstrate his ability and potential), he does not have the opportunity to advance to a higher position. Consequently, according to ERG theory, he grows frustrated, and such frustration eventually causes his previous level of needs – his relatedness needs – to dominate his thoughts. This means that once again Nick has the desire to make more friends and develop more social relationships[28].

2.1.3. Other Important Needs

Having succinctly discussed the two main needs theories, we would like to specifically examine three very pivotal individual needs: the needs for (a) achievement, (b) affiliation, and (c) power.

a. The need for achievement

This need is the individual desire of accomplishing goals or tasks more effectively than in the past. People who have a high need for achievement are likely to set challenging goals and take risks with decision making. Suppose, for example that Neary, Sales Manager of a company, has set a goal to increase sales of the business from 1% to 50%. The first goal is certainly too easy while the last is impossible to achieve. However, a target somewhere in the middle would be an ideal one. 15% or 20% might represent reasonable and reachable target. This goal is what is called the need for high achievement[29].

b. The need for affiliation

Individuals also experience the need for affiliation, which refers to the need for ‘human companionship’. People with high need for affiliation most likely want to be approved by others and are usually concerned about others' feelings. They tend to act and think as what they believe to be expected by others, specifically to those whom they long for friendship. Researchers recognize that people with high need for affiliation are most attached to jobs as sales and teaching positions where there is a lot of interpersonal contact[30].

c. The need for power

The third individual need is the need for power – ‘The desire to control one's environment, including financial, material, informational, and human resources’. Not everyone experiences this kind of need. Some people can spend a lot of time searching for power while some will try to avoid it if possible.

If three conditions can be met, people with high need for power can be very successful in management jobs. First, they must try to avoid seeking personal interests for power and think for the goods of the whole organization. Second, they must have a fairly low need for affiliation. This is because a desire to obtain power may force an individual to ‘alienate’ other people. Finally, they have to be able to control the limits of their desire for power if it has a negative impact on organizational or interpersonal relationships[31].

2.1.4. Herzberg’s Dual-Structure Theory

In the late 1950s and early 1960s, Frederick Herzberg developed what would be a very famous theory known as the Dual-Structure Theory. Originally called the ‘Two-Factor’ Theory, it went on to play a very important role in influencing managers’ decisions on employee motivation[32].

Herzberg and his associates started by asking around 200 accountants and engineers in Pittsburg to recall times they felt satisfied and motivated by their jobs and times they felt dissatisfied and unmotivated. He then went on to ask them to describe the reasons behind those good and bad feelings[33]. Surprisingly, Herzberg found that ‘entirely different’ factors were related to the employees’ feelings about their jobs. For instance, those who stated they were not satisfied because their jobs were ‘low-paid’ would not necessarily identify ‘high pay’ as a cause of satisfaction and motivation. Those people instead claimed that factors such as recognition or achievement were some of the main causes of job satisfaction and motivation[34].

These findings led Herzberg to conclude that the traditional view on job satisfaction and dissatisfaction, motivation and un-motivation was ‘incorrect’. The theorist insisted that ‘the opposite of job satisfaction is not job dissatisfaction but, rather no job satisfaction; and similarly, the opposite of job dissatisfaction is not job satisfaction, but no dissatisfaction.’[35] These two different dimensions led to him naming his theory the ‘Dual-Structure’ theory.

In addition, Herzberg claimed that the primary factors that cause satisfaction and motivation are called Motivation factors, such as achievement and recognition. The presence of these factors results in job satisfaction and motivation, while their absence leads to feelings of ‘no satisfaction’ rather than dissatisfaction. The other set of factors is called Hygiene factors, which refer to things such as job security, pay and working conditions. Without these factors, people will be dissatisfied; and if they are present, there will be feelings of ‘no dissatisfaction’, rather than satisfaction[36]. Figure 2.2 below compares the traditional view of human motivation with Herzberg’s Dual Structure theory.

Evaluation of the theory

Due to its fast gain in popularity, the dual-structure theory has been studied and analyzed by scientists more than most other theories in organizational behaviour.[37]

One criticism to this theory is that the original sample of accountants and engineers may not ‘represent the general working population’. Skeptics argue that the theory does not take into account the individual differences. In addition, further research has found that one factor, for example salary, may influence satisfaction in one sample and dissatisfaction in another, and that individual’s age and organizational level has a huge impact on the outcome of any one factor. Finally, the theory does not clearly identify the relationship between satisfaction and motivation[38].

Such criticisms obviously led to the shrinking popularity of the theory by organizational behaviour researchers. Nonetheless, its early esteem would mean that the theory still has a place and role to play in the field of organizational motivation.

2.1.5. The Expectancy Theory

Both Maslow's and Herzberg's motivation theories have been criticized for generalizing about human motivation. Our practical experience can show that ‘the same people are motivated by different things at different times and that different people are motivated by different things at the same time’[39]. The Expectancy Theory, first proposed by Victor H. Vroom in the 1960s, somehow focuses more on highly personalized rational choices that an individual makes when dealing with the prospect of having to work hard to achieve rewards. ‘Expectancy’ refers to the ‘subjective probability’ that one thing will result in another. Individual perception is therefore an essential part of Expectancy theory.

According to the expectancy model, people's motivation strength increases as their perceived effort-performance and performance-reward probabilities increase. Although the two terms may sound very complicated, they can easily be understood through simple examples. For instance, how strong can you be motivated to study if you expect to score poorly on your tests no matter how hard you study (low effort-performance probability) and when you know that the tests will not be graded (low performance-reward probability)? In contrast, your motivation to study will increase if you know that u can score well on the tests with just a little hard work (high effort-performance probability) and that your grades will be significantly improved (high performance-reward probability). Employees are no different to students - they are motivated to work harder when they believe their hard work will lead them to achieve personally valued rewards[40].

If employee contributions are based on their expectations, managers can take steps to try to cultivate favorable expectations among their employees. When people can expect personally valued rewards, they will undoubtedly work harder to try to accomplish their tasks. A good manager will listen to his/her employees, learn from his experience and try to discover what rewards certain employees value. By so doing, the manager can potentially enhance their employees’ willingness to put more efforts into their work[41].

2.1.6. Adams’ Equity Theory

Regarded as one of the ‘justice’ theories, Equity theory was first developed in 1962 by John Stacey Adams. It attempts to explain the satisfaction that derives from the fairness and equality that a manager brings to his/her employees. Equity theory places value on fair treatment, which is believed to be the major motivational factor among employees.

An individual will consider that he is treated fairly when he feels that the ‘ratio of his inputs to his outcomes’ is the same to other people around him. In this case, it would be acceptable for an employee who has much more work experience and who is a more senior colleague to receive higher compensation/salary for his/her job. On the other hand, if an employee feels that another individual who has the same qualifications and provides the same amount of efforts is earning more recognition or compensation, he will feel he’s treated unfairly and thus perform at a lower level on his tasks[42].

An employee who feels he is over-compensated may increase his effort. However, he may also change the perceptions of his inputs and feel a sense of superiority, which may lead to him decreasing his efforts instead[43].

However, just like other motivation theories, Equity theory has its own criticisms. Critics argue that a number of ‘demographic and psychological variables’ affect people’s perceptions of equality. In other words, what a manager feel is equal may be considered unfair by his employees. Secondly, because much of the research supporting the propositions of this Equity theory has been conducted in laboratory settings, some people may believe that it does not apply to the practical situations. Finally, skeptics have also argued that employees might perceive equity/inequity not only in terms of their relationships with their colleagues, but also with the overall system. This means that, for instance, an employee may view his inputs and outputs are relatively similar compared to his colleagues, yet may feel that the system as a whole is unfair[44].

Nevertheless, Adam’s Equity theory reminds us that people are hugely concerned of the way they are treated in their surrounding environment, team and system. For this reason, they must be managed, controlled, and treated fairly.

2.2. Types of Motivation

Now that we have studied a number of very important motivation theories, we can turn our attention to the types of motivation that managers can take into consideration in order to successfully motivate their employees.

2.2.1. Money and Motivation

‘No one works for free, nor should they’[45]. Pursuing money with hard work to provide security and comfort for oneself and their family is not the same pursuing money with a negative motive. Obviously, employees want to earn fair wages and salaries, and employers want them to know this is what they are getting for their hard work. Unsurprisingly, this all leads to the fact that employees and employers would all view money as the fundamental incentive for satisfactory job performance.

According to Perry and his colleagues, two general suggestions can be provided to managers:

1. Financial incentives are very important but their effectiveness also depends on organizational conditions.

Differences in organizational conditions contribute to possibility and effectiveness of various monetary incentives. Therefore, to ensure the success the implementation of any changes to existing incentives plans, companies are recommended to study those environment conditions.

2. Group incentive systems can also be very effective in private sector settings

Team-based or small-group incentives are described as rewards for individuals’ hard work as a team. In general, its effectiveness depends on the characteristics of its reward system, the organization, the team and the individual team members. Research suggests that equally divided small-group incentives maintain high level of productivity.

If, as acknowledged by many scholars and theorists, money is not the single most important motivation factor, what are the other types of motivation? Our next sections attempt to explain the most common types of motivation that good managers can take into account.

2.2.2. Motivation through Job Design

Considering the fact that the average adult spends half of their waking lifetime at work, to effectively motivate them no longer relies on the importance of money or other material objects. As jobs are the central feature of ‘modern existence’, feelings of having a challenging and interesting work can attach people to their jobs whereas a boring and tedious job, on the other hand, can become a serious obstacle to motivating people, not to mention the effect it has on an individual's physical and mental health. This is when Job design comes in to deepen a good manager's understanding and persuade them to adopt different approaches of dealing with employee mediation rather than the typical approach of motivating people through financial means[46].

There are two main strategies a manager can take to motivate employees:

Strategy one: Fitting people to jobs

To avoid continual dissatisfaction and reinforce motivation, three alternatives with proven track records include realistic job previews, job rotation, and limited exposure, each of which explains how a manager could fit the right people to the right jobs.

a. Realistic Job Previews: Managers commonly make unrealistically high expectations in recruits to persuade them into accepting a position. Dissatisfaction often appears in this kind of circumstances when high expectations of the jobs are brought down to earth by terrible or boring work. Realistic job previews - giving out honest information of what works involve in the job - have been useful in this kind of situation. Research has been done on two groups of telephone operators whose jobs are ultimately repetitive and boring. By giving out realistic job review film to the first group of telephone operators before getting hired, they actually had fewer thoughts of resigning and in contrast, another telephone operators group was given the "good news only" job review film before they got hired was found to have a higher thought of resigning from their jobs. This would prove that realistic job previews could be useful in reducing staff turnover[47].

b. Job Rotation: Job rotation is an alternative to eliminating job boredom. It refers to the action of periodically moving people from one specialized job to another. It can help neutralizing the boredom barrier in highly specialized jobs, but of course, it should be noted that balance is needed to achieve its ultimate effects. Frequency of rotating jobs cannot be too high or too low or it will lead to unsatisfactory outcomes instead.

c. Limited Exposure: Another way to deal with a tedious job is to limit the individual's exposure to it. This technique is called ‘contingent time off’ (CTO), it is about establishing a challenging yet fair daily performance standard, and letting employees go home if standard is met. CTO plan was implemented in a large manufacturing plant where employees were producing about 160 units a day with 10 percent rejects: "...if the group produced at 200 units with three additional good units for each defective unit, then they could leave the work site for the rest of the day. Within a week of implementing this CTO intervention, the group was producing 200+ units with an average of 1.5 percent rejects. These employees, who had formerly put in an 8-hour day, were now working an average of 6.5 hours per day and importantly, they increased their performance by 25 percent." Some employees find the CTO plan extremely motivating[48].

Strategy two: Fitting jobs to people

This second strategy is for managers to consider changing the job itself instead of the people. Two techniques are provided in this field: Job Enlargement and Job Enrichment.

a. Job Enlargement: Job enlargement is the process of combining two or more specialized tasks in the workflow sequence into a single job. For instance, a clerk working in an insurance claims department whose job is normally to type only the client's name and address on the claim form may be asked to add in works of typing in the claim description and disposition. A moderate degree of complexity and freshness can be introduced in this manner. However, critics claim that having two or more typically boring tasks do not necessarily help making a job challenging. Besides, job enlargement has as well been criticized by organized labor that it is a tricky tactic for adding more work in getting the same amount of salary. For one condition, if pay and performance are kept in balance, boredom barrier can be reduced a bit by job enlargement[49].

b. Job Enrichment: In general terms, job enrichment is to redesign a job to increase its motivating potential, in other words, it is to increase the challenge of one's work. Unlike job enlargement, this is about building more complexity into jobs by introducing planning and decision-making responsibility that is normally carried out at higher levels[50].

According to experts, jobs can be enriched by upgrading the five core dimensions of work:

  • Skill variety: The degree to which jobs are completed with a variety of different activities in the use of one's different skills and talents.
  • Task identity: The degree to which a job is done from beginning to end with a visible outcome.
  • Task significance: The degree to which the jobs involve significant impact on other people whether they are from the organization or the world at large.
  • Autonomy: The degree to which the jobs provide significant freedom, independence, and discretion to the individual in completing their work by letting them schedule the work and determine the procedures to be used.
  • Job feedback: The degree to which clear and direct feedback is provided to the individual when completing their work activities[51].

Note that, however, not all employees will respond positively to enriched jobs. Personal traits and motives influence the connection between core job characteristics and desired outcomes. Only those who have necessary knowledge and skills plus the desire for personal growth can be successfully motivated by enriched work. Job enrichment can effectively work when it is carefully planned, when management is committed to its success, and when employees truly desire additional challenge to their jobs[52].

2.2.3. Motivation through Rewards

Employees, or volunteers who donate their time and efforts for good causes, expect to receive rewards of some sort for their contributions. Managers have found that rewards play a significant role in motivating employees to work harder and longer. This section, therefore, attempts to identify the numerous types for rewards that can be administered by managers.

There are two types of rewards: Extrinsic and Intrinsic. Extrinsic rewards are external outcomes granted to someone by others, such as money, employee benefits, promotions, recognition, status symbols, and praise.[53] In other words, this kind of reward is provided by another person or by organizational system to individuals[54].

In contrast, intrinsic reward derives internally from individuals and can be experienced through their work, such as the feelings of competency, sense of accomplishment, personal development and self-esteem. The importance of being self-administered offers great advantages and power of "motivating from within". As a 50-year-old Steve Schifer, who works at a small copper kettle manufacturer in northern Ohio, once said, ‘It gets in your blood and you can't get rid of it, it's something you can create with your hands and no one else can’[55].

There are four ways in which extrinsic rewards can be administered in order to improve job performance and efficiency.

- Reward must satisfy individual needs

Motivation is an unlikely outcome if the reward does not satisfy individual needs. Since different people have different needs, what they expect to be rewarded from their work is also different. Some people tend to focus more on high wages, while others would prefer to be promoted to a higher position in the organization.

- One must believe that effort will lead to reward

An employee tends to work harder if they believe their efforts will lead to reward. According to the expectancy theory, an employee will not endeavor for a reward if they perceive it as unattainable. For example, a company has promised to pay for the leading salesperson to go on a trip for two to Hawaii. This will only prompt those who feel they have a good chance of winning it to work hard and try to sell as many of their products as possible. Those who believe the reward is highly unlikely to achieve will not be motivated to tray any harder[56].

- Rewards must be equitable

Reward must be fair and equitable. For instance, if the reward is a bonus payment of 100$, so each member, considering other things equal, should be rewarded with the same amount of money. In contrast, inequity will lead to jealousy and dissatisfaction in work[57].

- Rewards must be linked to performance

The manager can increase staff motivation by providing rewards to those who ‘give that little extra’ hard work. Schemes that can be used to reward employee based on their performance include profit sharing, annual bonus, and stock purchase[58].

2.3.4. Motivation through Quality-of-work-life innovations

One of the world authorities on this subject has once described Quality-of-work life (QWL) as "a process by which an organization attempts to unlock the creative potential of its people by involving them in decisions affecting their work lives." In other words, QWL program is an interpersonal connection between employees and the organization; it touches every aspect of modern work life. Three main categories of QWL program are flexible work schedules, participative management, and workplace democracy. The common characteristic of these three categories is that they give employees a degree of control over their own work lives, or to say that every step and decision they make does not only affect the company but also themselves, which leads to another kind of employee motivation[59].

a. Flexible Work Schedules

The standardized and normal work life starts from to, 40 hours a week; things started to be different when Flexible work schedules were introduced. Flexitime is a work-scheduling plan that offers employees the chance to determine their own arrival and departure times within specified limits. All employees must be present during a fixed time. Supposed an eight-hour day is required, the early bird can choose to arrive at, take a half an hour lunch break, and leave work at, on the other hand, people who like to come late can decide to come in at and leave at

Flexible work schedules can be introduced in several types, such as compressed workweeks (40 hours in less than 5 days), permanent part time (less than 40-hour workweeks), and job sharing (corresponding schedule that allows two or more part timers to share a single full-time job).

For all these years, employees have been working under the standard of the 40-hour, five days workweek. These flexible work schedules represent a significant adjustment to individual needs and circumstances[60].

b. Participative Management

By years of research and implementation, management scholars have tried hard to determine which part of management should be appropriate for employees to participate in, and fortunately, one scholar came up with the final answer of the four key areas of participative management. Employees are allowed to participate in (1) setting goals, (2) making decisions, (3) solving problems, and (4) designing and implementing organizational changes. Employee motivation and performance are said to have significant improvement via personally involved in one or more of the management areas. Participative management connects employees to their companies, making them more dedicated to their jobs.

To achieve the ultimate effect of participative management, some barriers are needed to overcome:

  • Every level of management may resist employee participation because they do not believe in its underlying philosophy.
  • To believe that its short-run costs outweigh its long-term benefits can end this program from the start.
  • Fear that participative management might threaten the authority and power over some part of management.
  • Managers who lack experience with consensual decision-making might fight the process.

Participative management is more than just a new motivation method, it involves great planning and a good background work is often needed to make sure that supportive climate exists.

c. Workplace democracy

Generally, workplace democracy covers all efforts to increase employee self-determination. This could be achieved through providing stocks and shares to employees. Letting the employees own part of the company's stock does not necessarily mean that they can take control over the company, but as stockholders, employees will be more dedicated to their work to increase the company's profitability. The harder they work, the greater their stock dividends will be. Another way would be to ask employees to manage the company. However, this concept has raised a lot of questions from scholars and managers and is highly debatable.

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· Oxford English Dictionary. (2005), ‘Dissatisfaction’, 7th Edition.

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[1] Kreitner, 1986, pp. 381

[2] Kreitner, 1986, pp. 381

[3] Moorhead and Griffin, 1998, pp. 118

[4] Moorhead and Griffin, 1998, pp. 119

[5] Wikipedia, 2009, ‘Motivation’

[6] Kreitner, 1986, pp. 381

[7] Moorhead and Griffin, 1998, pp. 122

[8] Wikipedia, 2009 ‘Needs’

[9] Oxford English Dictionary, 2005

[10] Oxford English Dictionary, 2005

[11] Wikipedia, 2009, ‘Incentives’

[12] Moorhead and Griffin, 1998, pp. 121

[13] Wikipedia, 2009, ‘Hendonism’

[14] Moorhead and Griffin, 1998, pp. 122

[15] Moorhead and Griffin, 1998, pp. 122

[16] Moorhead and Griffin, 1998, pp. 123

[17] Kreitner, 1986, pp. 385

[18] Moorhead and Griffin, 1998, pp. 124

[19] Kreitner, 1986, pp. 386

[20] Kreitner, 1986, pp. 382

[21] Kreitner, 1986, pp. 386

[22] Moorhead and Griffin, 1998, pp. 125

[23] Kreitner, 1986, pp. 387

[24] Moorhead and Griffin, 1998, pp. 125-126

[25] Wikipedia, 2009, ‘Maslow's hierarchy of needs’

[26] Moorhead and Griffin, 1998, pp. 126

[27] Moorhead and Griffin, 1998, pp. 126

[28] Moorhead and Griffin, 1998, pp. 126

[29] Moorhead and Griffin, 1998, pp. 129

[30] Moorhead and Griffin, 1998, pp..131

[31] Moorhead and Griffin, 1998, pp. 133

[32] Moorhead and Griffin, 1998, pp. 127

[33] Moorhead and Griffin, 1998, pp. 127

[34] Moorhead and Griffin, 1998, pp. 127-128

[35] Kreitner, 1986, pp.389

[36] Moorhead and Griffin, 1998, pp .128

[37] Moorhead and Griffin, 1998, pp. 128

[38] Moorhead and Griffin, 1998, pp. 129

[39] Kreitner, 1986, pp.390

[40] Kreitner, 1986, pp. 390

[41] Kreitner, 1986, pp. 390-391

[42] Wikipedia, 2009, ‘Equity Theory’

[43] Wikipedia, 2009, ‘Equity Theory’

[44] Wikipedia, 2009, ‘Equity Theory’

[45] Houran, ‘Money and Employee Motivation’,

[46] Kreitner, 1986, pp. 392

[47] Kreitner, 1986, pp.393-394

[48] Kreitner, 1986, pp.394

[49] Kreitner, 1986, pp.395

[50] Kreitner, 1986, pp.395

[51] Kreitner, 1986, pp.396

[52] Kreitner, 1986, pp.397-398

[53] Kreitner, 1986, pp.398

[54] Schermerhorn 2002, P.363

[55] Schermerhorn 2002, P.363

[56] Kreitner, 1986, pp.400

[57] Kreitner, 1986, pp.400

[58] Kreitner, 1986, pp.400

[59] Kreitner, 1986, pp.408

[60] Kreitner, 1986, pp.408