2.4.

Motivation

• Motivation
• Desire, effort, and passion to achieve something
• Classified as intrinsic or extrinsic
• Employer objectives
• Motivation
• Minimize cost
• Prestige
• Better recruitment
• Reduced labour turnover
• Control
• Employee objectives
• Purchasing power
• Recognition
• Compensation – high direct earnings, pensions, fringe benefits
• Taylor’s Theory
• Principle of scientific management
• Workers are motivated by cash
• Productivity can be improved by relating output/productivity to pay
• Division of labour and specialisation
• Standardization of work practice (seen in production lines)
• Workers should be chosen for their job based on ability
• Differentiated piecework
• Payment based on standard level of output
• Paid extra for output beyond that level
• Criticisms
• Ignored non-financial motivators
• Non-physical contribution may not be quantified
• Repetitive and monotonous work – job dissatisfaction
• Maslow’s Hierarchy of Needs
• People have 5 basic needs:
• Physiological/basic
• Satisfied by payment
• Security/safety – predictability and order
• Satisfied by job security, maternity leave, fringe benefits
• Social/love/belonging
• Satisfied by teamworking, anti-discrimination
• Esteem/ego – recognition and self-respect
• Satisfied by training and development, delegation, promotion
• Self-actualization
• Satisfied by giving freedom to employees
• Needs must be satisfied from the bottom up (basic to self-actualization)
• Criticisms
• Needs cannot be quantified
• Ignores individuality of needs
• Herzberg’s Theory
• Two factors affected motivation
• Hygiene/maintenance factors (physical)
• Factors that meet basic needs
• Does not motivate but demotivates if not met
• Motivators (psychological)
• Achievement, recognition, responsibility, and advancement leads to higher
satisfaction
• Democratic management style must be used
• Involves job enlargement, enrichment, empowerment (see below)
• Movement vs. motivation
• Movement – doing something because it needs to be done
• Based on extrinsic motivation
• Motivation – doing something because you want to
• Based on intrinsic motivation
• More important
• Individualism in terms of motivation
• Criticisms
• Does not apply to low-skill, low-wage jobs
• Some workers may not like the increased workload in job enrichment
• Adam’s Equity Theory
• Workers naturally compare their efforts/rewards to others in the workplace
• Employees should receive remuneration that reflects his efforts and competence
• Workers will be motivated if their remuneration is fair relative to others
• Inequality is by caused poor job analysis and evaluation
• Pink’s Theory
• States the importance of intrinsic motivation
• 3 factors:
• Autonomy
• Give employees control over when, how, and what they do and whom they
do it with
• Mastery
• Sense of progress in work and ability
• Tasks must not be too hard or too easy to foster improvement without
causing boredom or frustration
• Purpose
• Contributing to a greater cause
• Purpose and vision must be communicated
• Financial and non-financial motivation
• Theory X
• Extrinsic/financial motivation
• Managers believe that workers are lazy and must be supervised
• Theory Y
• Intrinsic/non-financial motivation
• Managers believe that workers are ambitious and enjoy their jobs
• Financial Motivation
• Wages
 • Time-based
• Rate is based on worker’s experience and responsibilities
• Overtime rate for work in excess of contracted time
• Workers are rewarded for time not effort
• Piece rate
• Based on no. of items produced or sold in a given time
• Motivated to work/sell more
• Lack of financial security – pressure to sell
• Workers might sacrifice quality for quantity
• Salary
• Fixed annual rate paid on a monthly basis
• Time-rate payment
• Little incentive to work hard due to consistent pay
• Difficult to reward better workers
• Can be improved by using appraisals
• Commission
• Output based system (based on how much they sell/produce)
• Pays workers based on percentage of sales or output contributed rather
than a fixed amount per unit like piece rate
• Similar advantages and disadvantages to piece rate
• Profit-related pay
• Pay linked to profits of the firm
• Strengthens employee loyalty
• Limits labor conflict (both managers and employees benefit from higher
profits)
• May be too insignificant
• Performance related pay (PRP)
• Based on individual performance/ability to meet goals
• Various forms:
• Performance bonus
• Loyalty bonus
• Pay rise
• Gratuity – bonus for completing contract
• Satisfies Equity Theory
• Problems of bias or how to quantify performance
• Targets may be too unrealistic
• Employee share ownership schemes
• Giving shares for free or at a discount
• Usually only given to senior management
• Impractical for most companies
• Fringe benefits (perks)
• Meets employee’s safety needs (Maslow) at a cost
• Includes medical insurance, bonus schemes, company car, subsidised meals,
discounts
• Non-financial motivation
• Job enlargement
• Horizontal expansion by increasing scope of work required
 • Enhances employee pride in work, feeling of responsibility
• May lower productivity or quality because of higher workload
• Job enrichment
• Provides employee with more complex and fulfilling tasks
• Adds sense of control, pride, and achievement
• Job rotation
• Shifting of cross trained workers to other tasks
• Allows understanding of different operating areas of business
• Can reduce fatigue, since new tasks are assigned
• Employee empowerment
• Employees are delegated tasks assigned to managers
• Increases employee motivation and productivity
• Managers must share:
• Decision-making power
• Rewards (based on organizational performance)
• Knowledge/expertise needed to enhance performance
• Employees must be highly skilled, motivated, and competent
• Managers are ultimately still liable for whatever they delegate
• Teamworking
• Staff work together on a task
• Reduce boredom, build sense of belonging, greater flexibility
• Adair Model
• 3 parts or effective teams
• Tasks – must engage whole group
• Team – must work collectively
• Individual – needs of the individual are met
• Other forms of non-financial motivation
• Recognition and praise
• Working environment
• Delegation
• Worker participation