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Motivation is the word derived from the word ’motive’ which means needs, desires, wants or drives within the individuals. It is the process of stimulating people to actions to accomplish the goals. In the work goal context the psychological factors stimulating the people’s behaviour can be-
One of the most important functions of management is to create willingness amongst the employees to perform in the best of their abilities. Therefore the role of a leader is to arouse interest in performance of employees in their jobs. The process of motivation consists of three stages:-
Therefore, we can say that motivation is a psychological phenomenon which means needs and wants of the individuals have to be tackled by framing an incentive plan
THEORIES OF MOTIVATION
Maslow’s Need Hierarchy Theory:
The best-known theory of motivation is probably Abraham Maslow’s hierarchy of needs theory. He pro-posed that people are motivated by a predictable five-step hierarchy of needs. According to Maslow, most individuals are not consciously aware of these needs; yet we all supposedly proceed up the hierarchy of needs, one level at a time.
Maslow put the following important propositions about human behavior:
Categories of Needs:
Maslow hypothesized that within every human being there exists a hierarchy of needs. He says that a man’s motivations occurs in terms of a predetermined order of needs.
At the bottom of the hierarchy are needs based on physical drives. These include the needs for food, water, sleep, and sex. Fulfillment of these lowest-level needs enables the man to survive. Nothing else becomes more important until these needs are satisfied. As Maslow has said, “It is quite true that man lives by bread alone—when there is no bread.”
These needs have few common features:
Once the physiological needs are reasonably satisfied, safety needs become significant. These needs consist of physical safety against fire, accident, murder, criminal assault or any other danger. Maslow also stressed emotional safety. It is a need for security against fear, tensions, frustrations, favoritism, unemployment, etc.
These needs relate to social processes, relationships or belongingness. Man is a social being. He wants love, affection, friendship, and association with social groups. These are the needs for human relations. When persons physiological and safety needs are satisfied, social needs become important motivators of behaviour.
Next in Maslow’s hierarchy are esteem or ego needs. These are of two types- (a) self- esteem needs, and (b) esteem for others. Self- esteem implies needs for self- respect, self-confidence, achieve- ment, competence, independence and freedom and feeling of personal worth. Esteem for others refers to need for status, power, prestige, recognition, awards etc. These needs can be satisfied through promotions, praise, job positions etc.
The highest level of Maslow’s hierarchy involves self-realization needs. These reflect our desires to realize our full potential. It is the need “to become more and more what one is, to become everything that one is capable of becoming.” It is related to self-concept. It gives self-fulfillment. It requires continuous self- development. It is rarely fulfilled.
After describing these five classes, Maslow separated these five needs into higher and lower levels. Physiological and safety needs were described as lower-order needs, and social, esteem, and self- actualization needs were called as higher-order needs. This difference was made to emphasize that the higher-order needs are satisfied internally, whereas lower-order needs are mainly satisfied externally.
According to this theory, people attempt to satisfy their physiological needs first. Until these needs are not satisfied, they dominate behaviour. When physiological needs are reasonably well- satisfied, the next category of safety needs become active and dominant demanding satisfaction. This process continues up to the top rung of the ladder of human needs. These needs are interdependent and overlapping.
Maslow says that a higher-order need arises only when a lower-level need is completely satisfied. Only unsatisfied needs motivate behaviour. A man gets motivation only when he is deprived of or threatened with deprivation of some need. A satisfied need ceases to be a motivator.
Evaluation of Maslow’s Theory:
Maslow’s need theory has received wide recognition, particularly among managers. It is helpful in analysing and understanding human behaviour.
It has the following merits:
Thus, the theory points out that effective managers can anticipate each employee’s personal need profile and to provide opportunities to satisfy emerging needs.
Many researchers have pointed out some deficiencies in Maslow’s theory as follows:
In the final analysis, it can be said that Maslow’s need theory is not a perfect answer in work motivation. Yet the theory, as Fred Luthans has observed, “Does make a significant contribution in terms of making management aware of the diverse needs of humans at work. The number and names of the levels are not important nor is the hierarchical concept. What is important is the fact that humans in the workplace have diverse motives.” Thus, a manager can motivate people by satisfying their needs.
During the 1950s, Frederick Herzberg proposed a theory of employee motivation based on satisfaction. He conducted a research study by having interviews with 200 engineers and accountants working in eleven different firms in U.S.A.
Herzberg concluded that two separate factors influenced motivation. These two classes of factors were associated with employee satisfaction and dissatisfaction. Hence, his concept has come to be called Herzberg’s two-factor theory. These factors are called hygiene factors and motivators,
These factors include working conditions, job security, salary, supervision, company policy etc. These are extrinsic to the job and environment centred. These factors are called “dissatisfiers” or hygiene factors as they are essential for the mental health of employees. These are also called maintenance factors, because they are necessary to maintain a reasonable level of satisfaction. If they exist in a work environment, they yield no dissatisfaction. But their existence does not motivate employees. These factors are not strongly motivating; however, their lack of existence would result in dissatisfaction.
These are job context factors. Motivators:
These factors are related to the content of the job. They are inherent in the job and operate primarily to build motivation. Their existence will yield feelings of satisfaction but their absence will not create strong dissatisfaction among employees. These include achievement, recognition, challenging work etc. These are called satisfiers. According to Herzberg, these job content factors are the real motivators.
Features and Implications of Herzberg’s Theory:
Herzberg’s theory led to the following conclusions:
Herzberg’s theory has two stages in the process of motivating employees. First, managers must ensure that the hygiene factors are not deficient. By providing hygiene factors at an appropriate level, managers do not stimulate motivation but merely ensure that employees are “not dissatisfied”.
Employees whom managers attempt to “satisfy” through hygiene factors alone will usually do just enough to get by. Hence, managers should proceed to stage two
Critical Appraisal of Herzberg’s Theory:
Herzberg’s framework of motivation has received a great deal of notice and acceptance among managers. It is helpful in understanding the effect of job characteristics on motivation and performance. It casts a new light on the content of work motivation.
Herzberg’s theory is important in the following way:
In spite of the seemingly value and importance, Herzberg’s theory has also been criticized by behavioural scientists on a number of points:
Overall, Luthans concludes, “Herzberg added much to the better understanding of job content factors and satisfaction, but like his predecessors, fell short of the content of work motivation.”
Theories of Motivation in Management # Work Motivation Theories:
There are various theories that have been propounded to understand what motivates people to work.
Some of the important theories are explained as under:
(i) Monistic or Economic Theory of Motivation
(a)(ii) Hierarchy of Needs Theory
Monistic theory of motivation is based upon the assumption that individuals are highly responsive to money reward. People feel highly motivated when rewarded with more money. People repeat their behaviour if it leads to reward.
The theory assumes that:
In 1943, an American psychologist Abraham Harold Maslow put forward his theory of human motivation. His theory is based on the Hierarchy of Human Needs. According to Maslow, human behaviour is related to his needs.
It is adjusted as per the nature of needs to be satisfied. In hierarchy of needs theory, Maslow has identified five types / sets of human needs arranged in a hierarchy of their importance and priority.
Maslow’s need hierarchy theory covers the following aspects:
According to Maslow, there are five general categories of needs given in an order:
At the base of the hierarchy are the physiological needs, which include basic needs like food, shelter, clothing, rest and recreation. These basic human needs have priority over all other needs. These needs cannot be postponed for long. Unless these basic physiological needs are satisfied, other needs do not motivate an employee.
After satisfying the physiological needs, the next needs felt are safety and security needs. Security needs are the needs for a safe and secure environment. In the workplace, these are the needs for job safety, job security, and fringe benefits.
Social needs relate to the desire to have social interaction, friendship, affection, belongingness with groups, acceptance, affection, and support from others and so on. Such needs become motivators when physiological and safety needs have been fairly satisfied.
Ego or esteem needs deal with the desire to receive attention and appreciation from others. In a work environment, this is the need for status and recognition for one’s contributions to the work group and the organisation.
Esteem needs are of two types:
Self-actualization needs include the needs for self-fulfillment and competency. At work, this translates into needs for personal growth, development, and self-respect. This is the highest among the needs in the hierarchy of needs suggested by Maslow.
Criticism of Maslow’s Need Hierarchy Theory:
Maslow’s need hierarchy theory is criticized on the following grounds:
Hence it can be concluded from Maslow’s theory that human beings generally try hard to satisfy their basic needs or lower order needs first before looking for satisfaction of higher order needs.
In 1960, Douglas McGregor formulated Theory X and Theory Y suggesting two aspects of human behaviour at work. In other words, two different views of individuals (employees)- one of which is negative, called as Theory X and the other is positive, so called as Theory Y.
The important assumptions underlying this theory are as follows:
Conclusion of Theory X:
An Organization with theory X type of management will have close supervision. As per McGregor, all assumptions about human nature are negative in their approach. So, a manager has to persuade, punish or reward such workers in order to achieve goals of an organization. Employees will have little or no influence over business policy. Autocratic type of leadership is required to lead such kind of people.
According to McGregor, Theory X was based on negative assumptions. So he suggested a different theory of managing people which was named as Theory Y.
The important assumptions of Theory Y, described by McGregor are:
Conclusion of Theory Y:
Theory Y is dynamic and flexible as an average employee is a sociable and smart person. An average person likes work, capable of assuming responsibility and accepting challenge and change, ambitious, and achievement-oriented.
Managers practicing theory Y attempt to get maximum output from their employees with minimum amount of supervision and control. Here, individual goals are coordinated with organizational goals. He is competent to exercise self- direction and self-control.
Thus, we can say that Theory X presents a pessimistic view of employees’ nature and behaviour at work, while Theory Y presents an optimistic view of the employees’ nature and behaviour at work.
The critics point out that – Although McGregor suggests the key to motivation is ‘job’, however in reality not everyone looks for motivation from the ‘job’ he / she does. There can be many more factors for motivation. A manager may also switch between the two approaches based on the requirements of the situation.
Traditionally, job satisfaction and dissatisfaction were viewed as opposite ends of a single continuum, when certain things are present on job like good pay, opportunity for growth, healthy working environment, etc. the employee will be satisfied. When they are absent, he is dissatisfied. The absence of dissatisfaction is satisfaction.
Frederick Herzberg’s theory of motivation is also called ‘Two Factor Theory’, and ‘Hygiene / Maintenance Theory of Motivation’. Herzberg conducted a widely reported motivational study on 200 accountants and engineers employed by firms in Pittsburgh area of the United States.
He asked these people to describe two important incidents at their jobs:
When did you feel particularly good about your job? When did you feel exceptionally bad about your job?
Motivators are job content factors and are inherent in the job. These factors have a positive influence on morale, satisfaction, efficiency and high productivity.
Some of these factors are:
Employees find these factors inherently rewarding. When motivation factors are present in job, they could cause satisfaction and motivation; when they are not present, the people feel no satisfaction or no motivation.
They are also called as satisfiers. Motivating factors motivate subordinates to take more interest in the work. Such factors raise efficiency and productivity of employees. As per Frederick Herzberg, motivating factors are essential in order to provide job satisfaction and to maintain a high level of job performance.
Hygiene factors also called as maintenance factors, dis satisfiers or extrinsic factors because they only help in maintaining the existing level of performance on the job. They are called as dis satisfiers because their absence dissatisfy the workers and lead to decline in their performance of workers from that of the existing level. They are called extrinsic because they are related to the work environment (job context) and not to the job content.
Some of the hygiene factors are:
Herzberg theory is criticized on the following reasons:
J. S. Adams formulated Equity theory of motivation in 1965 in USA. Adams’s theory is based on the basic assumption that members of an organisation expect justice, fairness and balance in the treatment they get from employers. As per J. C. Adams, individuals’ motivation level is concerned with his perception of fairness, equity, justice practiced by the management.
This theory of motivation is based on two assumptions about human behaviour:
Major Components of Equity Theory:
Other highlights of the theory are:
According to Adams, Equity is perceived when the ratio is equal. In other words, equity exists when an individual concludes that his/her own outcomes/input ratio is equal to that of other people. And if the ratio is unequal, then it will create a negative tension in an employee’s mind and thus he will be motivated to reduce his tension.
Adams theory is criticized on the following reasons:
Theories of Motivation in Management # Motivational Theories in the Workplace
Motivation the forces either internal or external to a person that arouse enthusiasm and resistance to pursue a certain course of action. According to Baron et al. (2008)- “Although motivation is a broad and complex concept, organizational scientists have agreed on its basic characteristics. Drawing from various social sciences, we define motivation as the set of processes that arouse, direct and maintain human behavior toward attaining some goal.”
There are many different motivation theories such as:
From the very beginning, when the human organizations were established, various thinkers have tried to find out the answer to what motivates people to work. Different approaches applied by them have resulted in a number of theories concerning motivation.
These all theories are broadly classified into three categories:
These are discussed, in brief, in that order.
1. Theories Based on Human Needs:
(i) Maslow’s Theory:
Abraham Maslow (Hierarchy of Needs) – Abraham Maslow was an American psychologist best known for his theory of the hierarchy of needs.
The following important proposition has been advanced by Abraham Harold Maslow (April 1, 1908 – June 8, 1970) about human behaviour in analysing his model:
Wants of a man are innumerable and never ending. So, as soon as one of his wants is satisfied, another appears in its place. This is a motivation which keeps men engaged on the work.
As soon as a need is satisfied, it loses its capacity to induce the man to work and only unsatisfied needs or fresh needs can motivate people to work.
Maslow is of the opinion that needs are satisfied in an order. As soon as the lower level needs are satisfied, those on the next higher level emerge and demand is created.
Maslow’s Need Hierarchy:
Maslow has suggested the following hierarchy of needs which an individual attempts to satisfy in an order:
Starting at the bottom and working upwards, the various needs can be understood as follows:
The physiological needs concern the needs of human body such as food, shelter, clothing, sex etc. They are basic to preserve human life and are more or less universal. These needs are at the lowest level in the hierarchy of needs.
These needs come second in the hierarchy order and are concerned with the physical and financial security. These include job security, physical security, security of income, old age provision, security from risks, etc.
Man, being a social animal is always interested to live in a society or group which loves him, most. He wants to give or receive love. These needs refer to the needs of conversation, sociability, exchange of feelings and grievances, recognition and belongingness.
Next in the hierarchy are esteem or egoistic needs. These needs may be- (i) self- esteem or (ii) public esteem.
Self-esteem means esteem in the eyes of self, i.e., a feeling that he is doing something worth-while. Public esteem means esteem or image
in the eyes of public such as praise, admiration, public appreciation, etc.
These are individual needs for realising his own potentialities, opportunity for creativity and for continuous development of the individual power and skill. In other words, these are what a person considers to be his mission in life.
The hierarchy of needs as given by A.H. Maslow and discussed above may be shown by the following diagram:
Lower Order and Higher Order Needs:
Maslow has further classified the five needs into two categories- (i) Lower order needs and (ii) Higher order needs.
The first two needs (Basic Physiological and Safety and Security needs) in the order are labelled by Maslow as lower- level needs. These needs are finite. These needs are to be satisfied in priority to others because they are needs of the first kind. A man cannot survive without them and a man will be ready to do anything to satisfy these needs.
A hungry man can do whatever he can to get the bread. As soon as, he satisfies his basic needs, his second need of security and safety get priority. It is so why a man collects grain for future use or tries to save money for his old age.
The rest three needs in the hierarchy (Belongingness social or love needs, esteem and status needs and self- actualisation needs) are categorised as higher-order needs. In other words, they are secondary needs. They relate to the personality or the society and are external needs. Higher-order needs are infinite or unlimited but they are satisfied only after lower level needs are satisfied.
All the three needs under this category should also be satisfied, in order of priority. Lower-level needs dominate higher-order needs but higher-order need can in no case dominate lower-level needs. These needs are likely to be dominant factors in motivating people at higher level in the management.
Critical Appraisal of the Model:
The model is very simple and helps in understanding the human behaviour of people at work but it has certain limitations.
The criticisms of the theory include the following:
Extent of Application in Organizations:
Maslow’s need priority order applies to people in general and in organizations, but it all depends upon social environment in which they live. Maslow’s Model seems to apply to Managers and professionals in the U.S.A. and the U.K. and other developed countries but in Japan and other continental countries, the model does not apply even to managers.
The model does apply even to under developed countries like India where economic conditions of workers do not seem to be satisfactory because they prefer to satisfy their physiological and security needs
The psychologist Frederick Irving Herzberg (1923-2000) extended the work of Maslow and proposed a new motivation theory popularly known as Herzberg’s Motivation Hygiene (Two-Factor) Theory. Herzberg conducted a widely reported motivational study on 200 accountants and engineers employed by firms in and around western Pennsylvania.
He asked these people to describe two important incidents at their jobs- (1) When did you feel particularly good about your job and (2) when did you feel exceptionally bad about your job. He used the critical incident method of obtaining data.
The responses when analysed were found quite interesting and fairly consistent. The replies respondents gave when they felt good about their jobs were significantly different from the replies given when they felt bad. Reported good feelings were generally associated with job satisfaction whereas bad feelings with job dissatisfaction.
Herzberg labeled the job satisfiers motivators and he called job dissatisfies hygiene or maintenance factors. Taken together, the motivators and hygiene factors have become known as Herzberg’s two-factor theory of motivation.
Frederick Herzberg- (Hygiene and Motivation Factors):
Frederick Herzberg proposed that satisfaction and dissatisfaction at work resulted from Hygiene and Motivation factors.
According to Herzberg, the opposite of satisfaction is not dissatisfaction. The underlying reason, he says, is that removal of dissatisfying characteristics from a job does not necessarily make
the job satisfying. He believes in the existence of a dual continuum. The opposite ‘satisfaction’ is ‘no satisfaction’ and the opposite of ‘dissatisfaction’ is ‘no dissatisfaction’?
However, Herzberg’s model is labeled with the following criticism:
Regardless of criticisms, Herzberg’s ‘two-factor motivation theory’ has been widely read and a few managers seem unfamiliar with his recommendations. The main use of his recommendations lies in planning and controlling of employees’ work.
Distinction between Maslow’s and Herzberg’s Theories:
Both Maslow and Herzberg theories focus on motivational factors. However, both differ from each other in their approaches. Maslow’s motivation theory is based on the hierarchy of needs. According to this theory, only unsatisfied needs motivate individuals. Once a need is satisfied, it ceases to be a motivating factor.
But, Herzberg’s motivation theory is based on motivational and hygiene or maintenance factors. According to Herzberg, hygiene or maintenance factors prevent job dissatisfaction but do not provide motivation to workers. In his view, Maslow’s lower order needs like physiological, safety and social needs act as hygiene or maintenance factors.
Comparison of Herzberg and Maslow Models:
Both the models are dealing with the same problem. Maslow talks in term of human needs whereas Herzberg talks of goals which satisfy those needs. Maslow describes various factors which impel a person to behave as he does whereas Herzberg tells us what makes a man satisfied or dissatisfied with his job, which depends very much on factors available on or off the job. Both models represent the two sides of the same coin.
Maslow is helpful in identifying needs or motives and Herzberg provides us with insights into goals and incentives that tend to satisfy these needs. If we know the high strength needs (Maslow Theory) of individual which we want to influence, then we should be able to determine what goals (Herzberg) we could provide in the situation to motivate those individuals.
On the other hand, if we know the goals of the people, the want to satisfy, we can very well predict their high priority needs. Hersey and Blanchard have combined these two things (needs and goals). Physiological, safety, social and part of the esteem and status needs under Maslow Model are all hygiene factors under Herzberg model.
The esteem needs are divided because there is a different between status and recognition. Status may be classified with physiological, safety and social needs as a hygiene factor while recognition is classified with esteem as motivational factors.
Another well-known need-based theory of motivation as opposed to hierarchy of needs or satisfaction- dissatisfaction is the theory developed by McClelland and his associates. David C. McClelland (May 20, 1917 – March 1998) developed his theory based on Henry Murray’s developed long list of motives and manifest needs used in his early studies of personality.
McClelland’s need theory is closely associated with learning theory, because he believed that needs are learned or acquired by the kinds of events people experienced in their environment and culture. He found that people who acquire a particular need behave differently from those who do not have.
His theory focuses on Murray’s three needs- achievement, power and affiliation. .
They are defined as follows:
This is the drive to excel, to achieve in relation to a set of standard and to strive to succeed. In other words, need for achievement is a behaviour directed toward competition with a standard of excellence. McClelland, an American psychological theorist, found that people with a high need for achievement perform better than those with a moderate or low need for achievement and noted regional/national differences in achievement motivation.
Through his research, McClelland identified the following three characteristics of high-need achievers:
The need for power is concerned with making an impact on others, the desire to influence others, the urge to change people and the desire to make a difference in life. People with high need for power are people who like to be in control of people and events. This results is ultimate satisfaction to man.
People who have a high need for power are characterized by:
The need for affiliation is defined as a desire to establish and maintain friendly and warm relations with other people. The need for affiliation, in many ways, is similar to Maslow’s social needs.
The people with high need for affiliation have these characteristics:
2. Theories Based on Human Nature:
Douglas McGregor formulated two distinct views of human being based on participation of workers. The first basically negative, labeled Theory X and the other basically positive, labeled Theory Y.
Theory X is based on the following assumptions:
On the contrary, theory Y assumes that:
What McGregor tried to dramatise through his theory X and theory Y is to outline the extremes to draw the fencing within which the organizational man is usually seen to behave. The fact remains that no organizational man would actually belong either to theory X or theory Y. In reality, he/she shares the traits of both.
What actually happens is that man swings from one set of properties to the other with changes in his mood and motives in changing environment.
Comparison of Theories X and Y:
Both theories have certain assumptions about human nature. In fact, they are reverse sides of a coin, one representing head and the other representing tail. Thus, these assumptions seem to be mutually exclusive.
The difference between two sets of assumptions can be visualised as follows:
Much after the propositions of theories X and Y by McGregor, the three theorists- Lyndall Fowner Urwick (March 3, 1891 – Dec. 1983), Rangnekar and William G. Ouchi (born in 1943) propounded the third theory labelled as Z theory.
The two propositions in Urwick’s theory are that:
History of Theory Z:
Professor Ouchi spent years researching Japanese companies and examining American companies using the Theory Z management styles. By the 1980’s, Japan was known for the highest productivity anywhere in the world, while America had fallen drastically. Ouchi wrote a book called Theory Z How American Business Can Meet the Japanese Challenge (1981), in this book; Ouchi shows how American corporations can meet the Japanese challenges with a highly effective management style that promises to transform business in the1980’s.
The secret to Japanese success, according to Ouchi, is not technology, but a special way of managing people. “This is a managing style that focuses on a strong company philosophy, a distinct corporate culture, long-range staff development and consensus decision-making”. Ouchi shows that the results show lower turn- over, increased job commitment and dramatically higher productivity.
William Ouchi doesn’t say that the Japanese culture for business is necessarily the best strategy for the American companies but he takes Japanese business techniques and adapts them to the American corporate environment. Much like McGregor’s theories, Ouchi’s Theory Z makes certain assumptions about workers.
Some of the assumptions about workers under this theory include the idea that workers tend to want to build happy and intimate working relationships with those that they work for and with, as well as the people that work for them. Also, Theory Z workers have a high need to be supported by the company and highly value a working environment in which such things as family, cultures and traditions and social institutions are regarded as equally important as the work itself.
These types of workers have a very well developed sense of order, discipline, a moral obligation to work hard and a sense of cohesion with their fellow workers. Finally, Theory Z workers, it is assumed, can be trusted to do their jobs to their utmost ability, so long as management can be trusted to support them and look out for their wellbeing.
One of the most important pieces of this theory is that management must have a high degree of confidence in its workers in order for this type of participative management to work. This theory assumes that workers will be participating in the decisions of the company to a great degree.
Ouchi explains that the employees must be very knowledgeable about the various issues of the company, as well as possessing the competence to make those decisions. He also points out; however, that management sometimes has a tendency to underestimate the ability of the workers to effectively contribute to the decision making process.
But for this reason, Theory Z stresses the need for the workers to become generalists, rather than specialists and to increase their knowledge of the company and its processes through job rotations and constant training. Actually, promotions tend to be slower in this type of setting, as workers are given a much longer opportunity to receive training and more time to learn the ins and outs of the company’s operations.
The desire, under this theory, is to develop a work force, which has more of a loyalty towards staying with the company for an entire career and be more permanent than in other types of settings. It is expected that once an employeedoes rise to a position of high level management, they will know a great deal more about the company and how it operates and will be able to use Theory Z management theories effectively on the newer employees.
Further abstraction from the list above:
This leads me to a seemingly strongly individualistic stance on motivation. However, although not stated explicitly it should be remembered that any of these statements could be made about the need to give charitably, share with one’s community, achieve nirvana, etc. and so can and should be considered in a multi- cultural context as well as a purely western individualistic way.
Performance-Related Pay (PRP):
Performance related pay assumes that people will be more motivated if they are paid more for success or desired behaviours. Although this is instinctively intuitive for most people, the actuality is that PRP doesn’t work and that paying people for their performance can actually de-motivate people- Why performance related pay doesn’t work
An aside for those reading to understand how to motivate people at work:
Many people come to motivation in an organizational context from the perspective of ‘the staffs are not motivated enough’. However in looking for tools to apply to others they show their fundamental belief that other people are defective in some way and need to be changed, i.e. the people are evil philosophy.
People are intrinsically and extrinsically motivated either way (i.e., good or evil theories), within the typical organizational context it is safe to assume that people are motivated to do a job to a required standard and get resources and recognition in exchange.
The role of the person questioning why their staff are not motivated should be to ask what aberration of the system of work is making people act in this unnatural (i.e., de-motivated) way and not to ask what is wrong with the people whilst assuming that their systems are perfect.
Fundamentally, you can’t change other people and so you have to change yourself and organizations instead. Giving up trying to change others is the most powerful leadership move anyone can make.
In Urwick’s view, the above two make people ready to behave positively to accomplish both organizational and individual goals.
However, Ouchi’s theory Z has attracted the lot of attention of management practitioners as well as researchers. It must be noted that Z does not stand for anything, but is merely the last alphabet in the English language.
Theory Z is based on the following four postulates:
Ouchi’s theory Z represents the adoption of Japanese management practices (group decision making, social cohesion, job security, holistic concern for employees, etc.,) by the American companies. In India Maruti-Suzuki, Hero-Honda, etc., apply the postulates of theory Z.
Chris Argyris (born July 16, 1923, an US Business theorist) has developed his motivations theory based on proposition how management practices affect the individual behaviour and growth. In his view, the seven changes taking place in an individual’s personality make him/her a mature one.
Argyris views that immaturity exists in individuals mainly because of organizational setting and management practices such as task specialisation, chain of command, unity of direction and span of management. In order to make individuals grow mature, he proposes gradual shift from the existing pyramidal organization structure to humanistic system; from existing management system to the more flexible and participative management.
He states that such situation will satisfy not only their physiological and safety needs, but also will motivate them to make ready to make more use of their potential in accomplishing organizational goals.
3. Theories Based on Expectancy of Human Beings:
One of the most widely accepted explanations of motivation is offered by Victor Vroom in his Expectancy Theory. It is a cognitive process theory of motivation. The theory is founded on the basic notions that people will be motivated to exert a high level of effort when they believe there are relationships between the efforts, they
put forth, the performance they achieve and the outcomes/ rewards they receive.
Thus, the key constructs in the expectancy theory of motivation are:
Thus, Vroom’s Motivation can also be expressed in the form of an equation as follows:
Motivation = Valence x Expectancy x Instrumentality
Being the model multiplicative in nature, all the three variables must have high positive values to imply motivated performance choices. If any one of the variables approaches to zero level, the possibility of the so motivated performance also touches zero level.
The expectancy theory of motivation is suggested by Victor Vroom. Unlike Maslow and Herzberg, Vroom does not concentrate on needs, but rather focuses on outcomes
Whereas Maslow and Herzberg look at the relationship between internal needs and the resulting effort expended to fulfill them, Vroom separates effort (which arises from motivation), performance and outcomes.
Vroom, hypothesizes that in order for a person to be motivated that effort, performance and motivation must be linked. He proposes three variables to account for this, which he calls Valence, Expectancy and Instrumentality.
Expectancy is the belief that increased effort will lead to increased performance i.e. if one works harder than this will be better.
This is affected by such things as:
Instrumentality is the belief that if you perform well that a valued outcome will be received, i.e., if one does a good job, there is something in it for
Valence is the importance that the individual places upon the expected outcome. For example, if one’s mainly motivated by money, he might not value offers of additional time off.
Having examined these links, the idea is that the individual then changes their level of effort according to the value they place on the outcomes they receive from the process and on their perception of the strength of the links between effort and outcome.
So, if he perceives that any one of these is true:
…then Vroom’s expectancy theory suggests that this individual will not be motivated. This means that even if an organization achieves two out of three, that employees would still not be motivated, all three are required for positive motivation.
Here there is also a useful link to the Equity theory of motivation- namely that people will also compare outcomes for themselves with others. Equity theory suggests that people will alter the level of effort they put in to make it fair compared to others according to their perceptions.
Crucially, Expectancy theory works on perceptions – so even if an employer thinks they have provided everything appropriate for motivation and even if this works with most people in that organisation it does not mean that someone won’t perceive that it does not work for them.
At first glance this theory would seem most applicable to a traditional-attitude work situation where how motivated the employee is depends on whether they want the reward on offer for doing a good job and whether they believe more effort will lead to that reward.
However, it could equally apply to any situation where someone does something because they expect a certain outcome. For example, one recycle paper because he thinks it’s important to conserve resources and take a stand on environmental issues (valence). He thinks that the more effort he puts into recycling the more paper he will recycle (expectancy); and he thinks that the more paper he recycles then 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.
Other theories, in my opinion, do not allow for the same degree of individuality between people. This model takes into account individual perceptions and thus personal histories, allowing a richness of response not obvious in Maslow or McClelland, who assume that people are essentially all the same.
Expectancy theory could also be overlaid over another theory (e.g., Maslow). Maslow could be used to describe which outcomes people are motivated by and Vroom to describe whether they will act based upon their experience and expectations.
However, Vroom’s expectancy theory has its critics. The important ones are:
But the valence or value people place on various rewards varies. For example, one employee prefers salary to benefits, whereas another person prefers to just the reverse. The valence for the same reward varies from situation to situation.
In spite of all these critics, the greatest point in the expectancy theory is that it explains why a significant segment of workforce exerts low levels of efforts in carrying out job responsibilities.
The most widely accepted explanations of motivation have been propounded by Victor Vroom. His theory is commonly known as expectancy theory. The theory argues that the strength of a tendency to act in a specific way depends on the strength of an expectation that the act will be followed by a given outcome and on the attractiveness of that outcome to the individual to make this simple, expectancy theory says that an employee can be motivated to perform better when there is a belief that the better performance will lead to good performance appraisal and that this shall result into realization of personal goal in form of some reward.
Therefore an employee is
Motivation = Valence × Expectancy The theory focuses on three things:
Valance × Expectancy
Lyman W. Porter and Edward E. Lawler developed a more complete version of motivation depending upon expectancy theory.
Actual performance in a job is primarily determined by the effort spent. But it is also affected by the person’s ability to do the job and also by individual’s perception of what the required task is. So performance is the responsible factor that leads to intrinsic as well as extrinsic rewards. These rewards, along with the equity of individual leads to satisfaction. Hence, satisfaction of the individual depends upon the fairness of the reward.
The demographics of the work force are changing! There are a number of different characteristics contributing to diversity. Among these are age, gender, ethnicity and education. Currently, the work force is getting older due to the baby boom generation. Additionally, women are now accounting for almost half of the work force. The racial mix of the country is changing rapidly, as the percentage of the white population continues to decline.
Finally, the level of education within the United States is increasing. However, while the face of the workforce is changing, many of our attitudes and beliefs have remained obstinate. When an organization continues to embrace negative implicit attitudes about race, age, gender, or other characteristics, discrimination in the workplace becomes an issue.
This discrimination in the workplace has multiple implications, including its effect on employee motivation. To better understand how discrimination and motivation relate, let’s examine a contemporary and a process theory of motivation.
The contemporary equity theory of motivation argues that a major input into job performance and satisfaction is the degree of equity (or inequity) that people perceive in their work situation. As a result, motivation is heavily impacted by things like cognitive dissonance and the exchange theory.
The theory is cognitively based because it focuses on the thought processes and perceptions of the employee. Inequity occurs when an employee perceives his/her outcomes to inputs and the ratio of a coworker’s outcomes to inputs to be unequal and can be schematically represented as follows-
Person’s outcomes/Person’s inputs < Other outcome’s/Other’s inputs = Inequality
If the person’s ratio is not perceived to be equal to the comparative person’s ration, he/she will strive to restore equity. The strife is considered employee motivation and the greater the perceived inequity, the more motivated an employee becomes. It is important to note that equality or inequality is based on perception and is subjective
Discrimination is unequal treatment of individuals and the equity theory of motivation would suggest that when we feel unequal, we become motivated to balance those ratios. This balancing can be accomplished by changing outcomes or inputs, cognitively distorting outcome’s or inputs, leaving the field and finally to act on or change the person whose ratio is greater than our own.
The process theory called the Porter-Lawler Model suggests that levels of motivation are based more on the value that individuals place on the reward. The components that effect motivation then, are called valence (what’s important to you) and expectancy (can I do it).
Porter and Lawler suggest that perceived inequality in this model plays a pivotal role in job satisfaction. Our motivation or effort leads to performance. Our performance is followed by intrinsic and extrinsic rewards. The perceived equity of those rewards leads to satisfaction.
Discrimination in this model becomes relevant after performance. Our perceptions of equal or unequal rewards may cause us to be unsatisfied with the job and less motivated to perform in the future. This is because the model is cyclical. If we are unsatisfied, we feel less motivated and less instrumental.
As a result, effort and performance decrease. It becomes particularly critical then, for an organization to evaluate its rewards system. An employee’s perception of inequality could be disastrous to a company!
The Equity Theory and Porter-Lawler Model are only two motivational theories that demonstrate the importance of avoiding discriminatory practices in the workplace. It is imperative that employees receive equal treatment on the job.
Though discrimination today is subtle, it continues to be problematic. If we continue to act preferentially, employee motivation will be adversely affected and eventually performance will cease. By participating in such practices, we are steadily building the foundation for disaster.
Alderfer has tried to rebuild the hierarchy of needs of Maslow into another model named ERG, i.e., Existence – Relatedness – Growth. According to him there are 3 groups of core needs. The existence group is concerned mainly with providing basic material existence. The second group is the individuals need to maintain interpersonal relationship with other members in the group. The final group is the intrinsic desire to grow and develop personally.
The major conclusions of this theory are:
Process Theories of Motivation:
Motivation begins with an individual feeling a need. This need is then transformed into behavior directed at supporting, or allowing, the performance of goal behavior to reduce that felt need. Theoretically, goal supportive behavior and goal behavior itself continue until the felt need has been significantly reduced.
Like the needs- goal theory, motivation strength is determined by the perceived value of the result of performing a behavior and the perceived probability that the behavior performed will cause the result to materialize. As both of these factors increase, so does motivation strength, or the desire to perform the behavior. People tend to perform the behaviors that maximize their rewards over the long term.
Equity theory looks at an individual’s perceived fairness of an employment situation and finds that perceived inequalities can lead to changes in behavior. When individuals believe that they have been treated unfairly in comparison with their coworkers, they will react in one of four ways-
The Porter-Lawler Theory accepts the premises that felt needs cause human behavior and that the effort expended to accomplish a task is determined by the perceived value of rewards that will result from finishing the task and the probability that those rewards will Morale is internal feeling and it is inspired by the environment. Motivation comes from enthusiasm, zeal, confidence in individuals or groups that they will be able to cope with the tasks assigned to them.
Porter and Lawler Model of Motivation:
Lyman Porter and Edward Lawler came up with a comprehensive theory of motivation, combining the various aspects. Porter and Lawler’s model is a more complete model of motivation. This model has been practically applied also in their study of managers. This is a multivariate model which explains the relationship that exists between job attitudes and job performance.
This model is based on four basic assumptions about human behaviour:
In fact, Porter and Lawler’s theory is an improvement over Vroom’s expectancy theory. They say that motivation does not equal satisfaction or performance. The model suggested by them encounters some of the simplistic traditional assumptions made about the positive relationship between satisfaction and performance. They proposed a multivariate model to explain the complex relationship that exists between satisfaction and performance.
What is the main point in Porter and Lawler’s model is that effort or motivation does not lead directly to performance. It is, in fact, medicated by abilities and traits and by role perceptions. Ultimately, performance leads to satisfaction.
The Various Elements of Porter and Lawler Model:
Let us briefly discuss the main elements of the model:
Effort refers to the amount of energy an employee exerts on a given task. How much effort an employee will put in a task is determined by two factors- (i) value of reward and (ii) perception of effort-reward probability.
One’s effort leads to his/her performance. Both may be equal or may not be. However, the amount of performance is determined by the amount of labour and the ability and role perception of the employee.
Thus, if an employee possesses less ability and/or makes wrong role perception, his/her performance may be low in spite of his great efforts.
Performance leads to satisfaction. The level of satisfaction depends upon the amount of rewards achieved. If the amount of actual rewards meet or exceed perceived equitable rewards, the employee will feel satisfied. On the contrary, if actual rewards fall short of perceived ones, he/she will be dissatisfied.
Rewards may be of two kinds – intrinsic and extrinsic rewards. Examples of intrinsic rewards are such as a sense of accomplishment and self actualization. Extrinsic rewards may include working conditions and status. A fair degree of research supports that the intrinsic rewards are much more likely to produce attitudes about satisfaction that are related to performance.
There is no denying of the fact that the motivation model proposed by Porter and Lawler is quite complex than other models of motivation. In fact, motivation itself is not a simple cause effect relationship rather it is a complex phenomenon.
Porter and Lawler have attempted to measure variables such as the values of possible rewards, the perception of effort-rewards probabilities and role perceptions in deriving satisfaction. They recommended that the managers should carefully reassess their reward system and structure. The effort- performance- reward- satisfaction should be made integral to the entire system of managing men in organizations.
THEORIES OF MOTIVATION IN MANAGEMENT # THEORIES OF MOTIVATION:
All of the theories depend on the individual’s perception of what is a valued motivator. What will be perceived as a motivator depends on the individual’s needs.
The theories of motivation are broadly classified into two as content, and process:
These theories attempt to identify what things motivate people. Some of these theories are:
Abraham Maslow was an American behavioural psychologist who worked both in academia and industry. He published a number of human relations books until the early 1970s, but it was his first book, ‘Motivation and Personality’ published in 1943, that set out his idea of the hierarchy of human needs.
Maslow assumes that what motivates people is unmet needs. People may be seeking to meet more than one category of needs at a time. Maslow argued that the factors that drive or motivate people to act lie on an ascending scale.
Once a group or order of needs is satisfied, the individual will not be motivated by more of the same, but will seek to satisfy higher order needs. What’s more, a higher order need will not be a motivator if lower order needs remain unmet. Maslow defined five orders of needs, listed in ascending importance. First three are the lower order needs and last two are the higher order needs.
Thus, for example, we won’t be concerned about working relationships or professional achievement if we are truly concerned for our own security. By the same token, a manager won’t motivate someone by talking about personal ambition and achievement if that person feels she/he is about to lose his/her job.
Of course, Maslow’s ideas were applied to the complete range of human experience, whereas for most of us, physiological and security needs are usually met to a large extent. But recent history has shown that when individuals are homeless, hungry and under threat, all social systems and self-respect break down.
Despite this, Maslow’s hierarchy still applies to modern commercial life, and managers would do well to think in these terms when trying to motivate staff.
There have been a number of variations on Maslow over the years. Some split physiological needs down into energy (food, warmth) and protection (shelter). Others have added power – the need for influence over the actions of others, either person-to-person, or group-to-group.
This motivation theory is based on the assumption that through life experiences, people develop various needs.
The three needs include:
People have all of these needs to some extent. The relative strength of the needs influences what will motivate a person.
Frederick Herzberg studied and practised clinical psychology in Pittsburgh, where he researched the work-related motivations of thousands of employees. His findings were published in ‘The Motivation to Work’ in1959.
He concluded that there were two types of motivation:
So, once you’ve satisfied the Hygiene factors, providing more of them won’t generate much more motivation, but lack of the motivation factors won’t of themselves demotivate. There are clear relationships to Maslow here, but Herzberg’s ideas really shaped modern thinking about reward and recognition in major companies.
Employees’ satisfaction and dissatisfaction stem from different sources. Dissatisfaction results from the absence of what Herzberg calls hygiene factors like – salary, relationship with others, etc. Satisfaction results from the presence of motivating factors like – opportunities, etc. The supervisor has control of many of the motivating factors, including recognition, responsibility, advancement, and personal growth.
Douglas McGregor published ‘The Human Side of Enterprise’ in 1960, in which he suggested that traditional management methods (which he called Theory X) might not be the only way to get people motivated. Instead, we could take a different approach (based on Theory Y) and achieve the same if not more.
Theory X is the traditional view of direction and control, based on these assumptions:
Theory Y is based on the integration of individual and organizational goals, assumes:
Theory Y is not a soft option. In fact, it can take as much management effort as Theory X, but the effects of a Theory Y approach will last longer. The Theory X manager is a dying breed (although it has to be said he’s not yet extinct), and Theory Y lies behind most modern approaches to motivation. Nowadays, the terminology is used as a polite way of referring to the old command- and-control approach to management-the trouble is the diehard Theory X manager won’t pick up the subtle criticism.
Process theories look at the process of motivation rather than specific motivators. The way to explain motivation is to look at it as a process.
Two major process theories are:
Victor Vroom assumes that people act as they do to satisfy needs they feel. He sets out to explain what determines the intensity of people’s motivation.
He explains that motivation depends on two things:
The strength of motivation equals the perceived value of the outcome times the perceived probability of the behaviour resulting in the outcome. In other words, people are most motivated to seek results they value highly and think they can achieve. This theory is based on employees’ perceptions of rewards and whether they are able to achieve those rewards.
(ii) Skinner’s Reinforcement Theory of Motivation:
B. F. Skinner says that people behave as they do because of the kind of consequences they experience as a result of their behavior. Broadly speaking, people keep doing things that lead to consequences they like, and avoid doing things that have undesirable consequences. For example, praise feels good, so people tend to do things that get them praised. Supervisors can encourage or discourage a particular kind of behaviour by the way they respond to the behaviour.
Consequences can be thought of as:
Supervisors must consider individual differences in designing rewards. What motivates one person may not motivate another. Likewise, not all rewards are under the control of the supervisor. Organisational policy, labour contracts, and laws may dictate what an employee may receive. Some supervisors and other managers assume that the main thing employees want out of a job is money.
Based on the content theories of motivation, it makes sense to say that money motivates people when it meets their needs. When a person has high financial demands and relatively low income, money may be a motivator. If an individual is financially comfortable, non-financial rewards, such as a sense of accomplishment, are increasingly important.
Human behaviour in organisation is the study and application of knowledge about how people, individuals, and groups act in organisations. It does this by taking a system approach. That is, it interprets people-organisation relationships in terms of the whole person, whole group, whole organisation, and whole social system.
It encompasses a wide range of topics, such as human behaviour, change, leadership, teams, etc. Its purpose is to build better relationships by achieving human objectives, organisational objectives, and social objectives.
Although we haven't implemented it yet, we're developing a feedback system that rewards employees for engaging with our wiki and for learning how to use our application via our training videos. We further reward performance based on meeting certain goals. A proven motivator for students and employees alike is earning a "badge" or points for committing to certain tasks
If you let them know you trust and depend on them, they will fill those shoes sooner than you think. A vote of confidence can go a long way. Let them know you trust them to do the best job possible and they will rarely disappoint you.
You want lofty ambitions, but set up smaller goals along the way to keep people in it. Rather than make a billion this year, focus on getting 100 new customers this week-something that will get you to that billion. Then reward the team for achieving the goal with an afternoon off, a party, etc. They will see that your goals are realistic and everyone benefits from working hard
I am able to motivate my employees by giving them a purpose. When you accomplish that, they understand the vision better and are able to execute more strongly. In addition, by understanding their purpose and the purpose of the business, an employee is better able to understand how they fit into the big picture.
I'm always pumping energy through the office. I'm really enthusiastic and want my staff to feed off that positive energy.
Because culture is so important to me, I play music, have fun, joke around, and play games. We work hard, but we play hard too. You have to be in the moment and high-energy all the time! --JoshYork,
I am very open with employees about what's happening at the highest level so there are no surprises and everyone has a chance to ask questions and give feedback. I want employees to feel included in big decisions and committed to the direction our company takes. This has helped to sustain motivation and increased company loyalty and pride
Aligned incentives are the only true way to ensure everyone on a team is working toward a common goal. Framing the strategy in multiple ways ensures each stakeholder has a clear, personal understanding of how working together benefits himself and the team. This technique allows you to motivate the team to accomplish amazing things
Ask what they do and don't like working on, share the big picture company goals, and respond to their questions. Discern their goals and then invest in their professional growth. During one-on-one check-ins, listen to their ideas, because they're the best at what they do. Respect their personal schedules and non-work time, and don't ever pit their goals/timelines against each other
We developed Value bot-an app for Slack that calculates how many times each employee was praised-in order to send daily and monthly summaries. Whoever garners the most kudos wins various awards and recognition. Value bot has helped us to visualize our culture and reiterate how much we support one another. The positive energy we create in the office helps us to attract and retain talent
We have a few fun incentives, like an in-office "phone booth" style machine that lets you grab dollar bills. It's a fun little motivator that the sales team uses on a smaller scale. Otherwise, it's also important to encourage employees to take vacation time. A culture that prioritizes work-life balance, yields increased productivity and overall happiness in the workplace
It's amazing how a simple "please" and "thank you" fares with employees. We simply speak to staff the way we would want to be spoken to. We also have an open-door policy when it comes to suggestions and ideas. When employees feel that their voice matters, they in turn feel confident about their positions in the company and that they have more at stake than just a paycheck
Motivating employees is not just about giving them vacation time- it's about showing them they make a difference and are valued. Every time we have a meeting, whether large or small, we let a different team member lead the conversation and the topics discussed. Not only can they share their opinions and be heard this way, but they are motivated to make their words and ideas happen afterwards
It's important that employees understand the bigger picture and can see how what they are doing in the moment will eventually contribute to an end goal. Give them tasks and projects to work on and make sure they understand how this fits into the big picture. Talented employees will go above and beyond what you expect of them.
At Convene, every management and executive meeting starts off with each department lead recognizing someone from their team who has gone above and beyond for the company or a client. This positive feedback loop motivates team members, and it holds management accountable for staff recognition
The organisation’s focus is always on performance. The performance and efficiency of operation depends upon employee’s morale. ‘Morale’ is an attitude of satisfaction with desire to continue in and willingness to strive for the goals of a particular organization. It generally refers to feeling of enthusiasm, zeal, confidence in individuals or groups that they will be able to complete the tasks assigned to them. A person’s enthusiasm for his job reflects his attitude of mind to work, environment and to his employer, and his willingness to strive for the goals set for him by the organization in which he is employed
Factors determining Morale
Morale is a mix of many factors and they have the capability to increase or decrease morale. Many scholars have suggested different factors over the course of time. We will list those factors below.
The name and fame of the organization play a very important role in shaping the attitude of an employee. The same person will perform differently in two different companies. Public perception of the organization is an important factor. Someone working for Google is most likely to take ownership of the work when compared to someone working for some random small company ABC Softwares.
Nature of the work
Nature of work is an important factor. Someone performing a routine task over and over again for a long period of time will get bored of that. The human mind likes challenges. When they are not presented with some new challenges, they start feeling bored with the task. Some organizations do not promote peer communication in some units like an assembly line. This makes work less enjoyable.
More the supervision, less the enthusiasm. No one likes a big boss over his/her head. Too much monitoring and supervision make people feel anxious and this hampers the performance rather than improving it.
This is again an important factor. If the employee feels satisfied with the job, there will be more energy in the system. Satisfaction may arrive from various factors such as career growth, recognition, the value in the organization, working conditions, welcoming attitude for new ideas, learning opportunities, training, etc.
How a person sees himself has a lot to do with his attitude. People having high self-confidence, good social life, and good health are found to be more optimistic about life and work. The attitude of those, having low confidence, poor social life, not so good health, is mostly negative.
Attitude towards the reward system
What someone thinks of a reward is also a key factor. People like rewards. People value rewards based on their personal belief system. The organization should take the personality of the employee into consideration when announcing a reward.
It is found that younger workers are more dissatisfied as compared to elders. Elders are found to be more content and positive towards the work and life both. This may be due to the fact that elders are already having the experience and the stability of the career which the youngers are striving for.
Education level has a lot to do with the expectations of the job and the employer. People with lower educational backgrounds are found to have a more positive outlook when compared to highly educated people. We can say, education is inversely related to the positive attitude, the outlook of the job role and the pay scale.
Occupation level means the position in the organizational hierarchy. This, of course, moves upward with time and experience. The higher one goes on the organizational ladder, the better the attitude.
Activities, other than the regular job, also play an important role here. The happiness of the family and friends, the wellbeing of the people one cares for, medical conditions, any kind of negative addiction, etc can increase or decrease morale accordingly.
ROLE OF INCENTIVES IN BUILDING UP MORALE
An incentive is a motivator that can be both extrinsic and intrinsic in nature. Some basic examples are grades in school and bonuses at the workplace. The incentive is an external element that is introduced to someone to induce the behavior towards a goal.
According to study.com, incentives are what motivate you to behave in a certain way, while preferences are your needs, wants and desires. Economic incentives provide you the motivation to pursue your preferences.
Incentives are very helpful to ensure a higher level of morale among employees. There are various kinds of incentives used for this purpose. Let us have a look at those-
Types of Incentives Monetary Incentive
This is the most common way of providing incentives, mostly in form of bonuses. Money is an important factor for any individual. This serves the purpose of recognition as well as provides some funds to the individual as a reward. This way, it caters to the initial three needs of Maslow’s need hierarchy. This is extrinsic in nature.
This is an intrinsic incentive that is used to satisfy one’s ego, boost esteem and elevate self-respect. All the aforementioned changes translate to increased ownership of the tasks and improved participation in the organization. This may be in the form of praise, recognition, promotion, transfer to the desired location, posting to the desired department, etc. Even food can be an incentive and it is much appreciated among employees.
These are mostly positive in nature and given as a reward for good work. This includes praise, recognition, promotion, transfer to the desired location, posting to the desired department, perks, allowances, etc.
It is corrective in nature and serves the purpose of correcting or rectifying the mistakes of the employees. It involves fines, penalties, unwanted transfers, demotions, etc.
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