Motivation Strategies

To some extent, a high level of employee motivation is derived from effective management practices. To develop motivated employees, a manager must treat people as individuals, empower workers, provide an effective reward system, redesign jobs, and create a flexible workplace.

Empowering employees
Empowerment occurs when individuals in an organization are given autonomy, authority, trust, and encouragement to accomplish a task. Empowerment is designed to unshackle the worker and to make a job the worker's responsibility. In an attempt to empower and to change some of the old bureaucratic ideas, managers are promoting corporate intrapreneurships. Intrapreneurship encourages employees to pursue new ideas and gives them the authority to promote those ideas. Obviously, intrapreneurship is not for the timid, because old structures and processes are turned upside down.

Providing an effective reward system

Managers often use rewards to reinforce employee behavior that they want to continue. A reward is a work outcome of positive value to the individual. Organizations are rich in rewards for people whose performance accomplishments help meet organizational objectives. People receive rewards in one of the following two ways:

Extrinsic rewards are externally administered. They are valued outcomes given to someone by another person, typically a supervisor or higher level manager. Common workplace examples are pay bonuses, promotions, time off, special assignments, office fixtures, awards, verbal praise, and so on. In all cases, the motivational stimulus of extrinsic rewards originates outside the individual. Intrinsic rewards are self-administered. Think of the natural high a person may experience after completing a job. That person feels good because she has a feeling of competency, personal development, and self-control over her work. In contrast to extrinsic rewards, the motivational stimulus of intrinsic rewards is internal and doesn't depend on the actions of other people.

To motivate behavior, the organization needs to provide an effective reward system. An effective reward system has four elements:

Rewards need to satisfy the basic needs of all employees. Rewards need to be included in the system and be comparable to ones offered by a competitive organization in the same area.

Rewards need to be available to people in the same positions and be distributed fairly and equitably. The overall reward system needs to be multifaceted. Because all people are different, managers must provide a range of rewardspay, time off, recognition, or promotion. In addition, managers should provide several different ways to earn these rewards.

This last point is worth noting. With the widely developing trend toward empowerment in American industry, many employees and employers are beginning to view traditional pay systems as inadequate. In a traditional system, people are paid according to the positions they hold, not the contributions they make. As organizations adopt approaches built upon teams, customer satisfaction, and empowerment, workers need to be paid differently. Many companies have already responded by designing numerous pay plans, designed by employee design teams, which base rewards on skill levels. Rewards demonstrate to employees that their behavior is appropriate and should be repeated. If employees don't feel that their work is valued, their motivation will decline.

Redesigning jobs
Many people go to work every day and go through the same, unenthusiastic actions to perform their jobs. These individuals often refer to this condition as burnout. But smart managers can do something to improve this condition before an employee becomes bored and loses motivation. The concept of job redesign, which requires a knowledge of and concern for the human qualities people bring with them to the organization, applies motivational theories to the structure of work for improving productivity and satisfaction When redesigning jobs, managers look at both job scope and job depth. Redesign attempts may include the following:

Job enlargement. Often referred to as horizontal job loading, job enlargement increases the variety of tasks a job includes. Although it doesn't increase the quality or the challenge of those tasks, job enlargement may reduce some of the monotony, and as an employee's boredom decreases, his or her work quality generally increases. Job rotation. This practice assigns people to different jobs or tasks to different people on a temporary basis. The idea is to add variety and to expose people to the dependence that one job has on other jobs. Job rotation can encourage higher levels of contributions and renew interest and enthusiasm. The organization benefits from a cross-trained workforce. Job enrichment. Also called vertical job loading, this application includes not only an increased variety of tasks, but also provides an employee with more responsibility and authority. If the skills required to do the job are skills that

match the jobholder's abilities, job enrichment may improve morale and performance.

Creating flexibility
Today's employees value personal time. Because of family needs, a traditional nine-tofive workday may not work for many people. Therefore, flextime, which permits employees to set and control their own work hours, is one way that organizations are accommodating their employees' needs. Here are some other options organizations are trying as well:

A compressed workweek is a form of flextime that allows a full-time job to be completed in less than the standard 40-hour, five-day workweek. Its most common form is the 4/40 schedule, which gives employees three days off each week. This schedule benefits the individual through more leisure time and lower commuting costs. The organization should benefit through lower absenteeism and improved performance. Of course, the danger in this type of scheduling is the possibility of increased fatigue. Job sharing or twinning occurs when one full-time job is split between two or more persons. Job sharing often involves each person working one-half day, but it can also be done on weekly or monthly sharing arrangements. When jobs can be split and shared, organizations can benefit by employing talented people who would otherwise be unable to work full-time. The qualified employee who is also a parent may not want to be in the office for a full day but may be willing to work a half-day. Although adjustment problems sometimes occur, the arrangement can be good for all concerned. Telecommuting, sometimes called flexiplace, is a work arrangement that allows at least a portion of scheduled work hours to be completed outside of the office, with work-at-home as one of the options. Telecommuting frees the jobholder from needing to work fixed hours, wearing special work attire, enduring the normal constraints of commuting, and having direct contact with supervisors. Home workers often demonstrate increased productivity, report fewer distractions, enjoy the freedom to be their own boss, and appreciate the benefit of having more time for themselves. Of course, when there are positives, there are also negatives. Many home workers feel that they work too much and are isolated from their family and friends. In addition to the feelings of isolation, many employees feel that the lack of visibility at the office may result in the loss of promotions.

Executive Summary Nestle is the worlds largest food, and nutrition group, not only in terms of its sales but also in terms of its product range and its geographical presence: Nestl covers nearly every field of nutrition: infant formula, milk products, chocolate and confectionery,

instant coffee products, frozen ready-made meals, mineral water etc. Nestle also a major producer of pet food. Nestle management provided their employees functionally with good environment, they also influences their employees various facilities like Healthy salary, increments .For this reason these employee more motivated and ready to make much more contribution to the Organization, when these organization fails to gives their employees facilities then employees develops a feeling of dissatisfaction. Mainly we focus this report how to an employees motivated, also various theory to apply in motivation. We are acquired more experience to research and analysis this report, that help us future job performance. We also learn various things .We collecting data and some valuable information by internet from Nestle Bangladesh Ltd. Official web-site, friend and annual report. We create these report by Microsoft office 2003. Finally, We thanked those people who are help through valuable information of us. Also special thanks our honorable Teacher Sadia Tangem for her guideline 1.1: Background of the Report An employee has may a grievance. For this reason develop a Dissatisfaction in employees mind. Employees motivation is a part of Organizational Behavior, since we are student of BBA, and this part of BBA program, our Organizational Behavior course teacher Sadia Tangem assigned us to prepare a report on Employees motivation in a multinational organization as related topic Organizational Behavior course. We have selected our report topic as Employees motivation in Nestle Bangladesh Ltd.. We have made a survey for required information in Nestle official site in net. We have prepared our report on January 3, 2012 which will be submitted by January 4, 2012. 1.2: Objective of the Study We have prepared this report based on two purposes. Those are1) To develop our Knowledge how to an employee motivated Program 2) And provide more Valuable Information gathered for who passionate employee to want to join in this company 1.2.1 Primary Objective:

The report aims to provide information on suggest more valuable information to how the employee motivated effective of by the Nestle Bangladesh through Management 1.3: Scope of the Study There is a certain boundary to cover this report. Our particular report only covers on how the employee motivated Nestle Bangladesh Ltd. We mainly focus what types of motivation process follow and what types of principles follow to motivated Nestle Bangladesh. 1.4: Limitations of the Study We are lucky enough to get a chance to prepare a report on Employee Motivation of Nestle Bangladesh Ltd. We tried heart & soul to prepare a well-informed report. But unfortunately we faced some difficulties when preparing this report. We tried to overcome the difficulties. In spite of trying our level best, some difficulties that hamper our schedule report work 1.4.1 Shortage of time: Within a short time, we need to prepare some other courses reports for in this session. For this reason, we could not get a fluent time schedule for the report. 1.4.2 Limitation of related with the organization: The employees of Nestle Bangladesh Limited were too busy of there work. For this, they did not sufficient time to fulfill our queries and some of them neglected us to support. 1.4.3 Difficulty in collecting data: Many employers of the organization were not well known about all information that we asked them. Many of them also hesitated to answer the questions. These things hampered the information collection. 2.0 Methodology 2.1 Sources of collecting data: We are collecting through two types,those are I. Primary data II. Secondary data

Primary Data: The employees of Nestle Bangladesh Limited were too busy of there work. For this, they did not sufficient time to fulfill our queries and some of them neglected us to support.

Secondary Data: We collecting data and some valuable information by internet from Nestle Bangladesh Ltd. Official web-site and others web site, friends and many others peoples. 2.3 Software used: Microsoft Word 2003 2. Introduction / Meaning of Motivation: Motivation is a term that refers to a process that elicits, controls, and sustains certain behaviors. For instance: An individual has not eaten, he or she feels hungry, as a response he or she eats and diminishes feelings of hunger. According to various theories, motivation may be rooted in a basic need to minimize physical pain and maximize pleasure, or it may include specific needs such as eating and resting, or a desired object, goal, state of being, ideal, or it may be attributed to less-apparent reasons such as altruism, selfishness, morality, or avoiding mortality. Conceptually, motivation should not be confused with either volition or optimism.[1] Motivation is related to, but distinct from, emotion. Intrinsic motivation refers to motivation that is driven by an interest or enjoyment in the task itself, and exists within the individual rather than relying on any external pressure. Intrinsic Motivation is based on taking pleasure in an activity rather working towards an external reward.[6] Intrinsic motivation has been studied by social and educational psychologists since the early 1970s. Different types of motivation are frequently described as being either extrinsic or intrinsic. Extrinsic motivations are those that arise from outside of the individual and often involve rewards such as trophies, money, social recognition or praise. Intrinsic motivations are those that arise from within the individual, such as doing a complicated cross-word puzzle purely for the personal gratification of solving a problem. Internal and external factors that stimulate desire and energy in people to be continually interested in and committed to a job, role, or subject, and to exert persistent effort in attaining a goal. The only way to get people to like working hard is to motivate them. Today, people must understand why theyre working hard. Every individual in an organization is motivated by something different. Financial Motivation Managers find many ways to motivate their employees, so they desire to perform to the

best of their abilities. Financial rewards and incentives are common in the business world today; although, most experts agree money is not the best motivator because the motivational effect of most financial rewards does not last. According to Donna Deeprose (1994), For one thing, while the presence of money may not be a very good motivator, the absence of it is a strong demotivator. Therefore, financial rewards are an absolutely necessary base to successful motivate a companys workers. The most common types of financial rewards that will be discussed in this paper are salary increases, profit sharing, incentive travel, and paid time-off. Salary increases.As has been mentioned, the absence of salary increases or bonuses can be a strong de- motivator, primarily because people use money as a scorecard to measure their achievement. Money is also an indicator to the person of how important he or she is perceived to be within the organization. The absence of salary increases or bonuses to some employees would indicate that they are not valued within the organization. The economy has been in a constant decline for the last few years. As the economy Continues to suffer, companies are facing the challenges of giving raises or bonuses. In recent years, most employees are willing to give up a raise if it means they could avoid being laid-off. In a year when money is not available for bonuses and raises, companies can make wise use of recognition programs and team rewards. But companies cannot adopt a products only policy for long. Experts say one year is the limit If employees go for more than one year without receiving a raise or a bonus, their productivity is likely to decline, and valuable employees may be tempted to look for other employment, which can be costly in rehiring expenses. Profit-sharing. Profit sharing can be a great way to motivate company staff because it benefits both the employee and the employer. This is a win-win situation for both. A couple of most commonly used types of profit sharing programs are those based on the companies productivity and those which offer stock as a reward to employees. Most programs are designed to reward employees for the company increasing its profit or Revenue. These programs are designed to give employees a bonus check, if the company Performs better in a given month in the current year compared to the previous year. This type of profit sharing program provides immediate benefit and rewards for employees. When compensation is tied to performance, companies realize the benefit in the following way: Financial rewards are also an effective motivator, and further, have the added advantage of being a need that is generally never satisfied. Linking people working smarter with some equitable reward system serves to reinforce the motivational process. Gain-

sharing is an effective reward system capitalizing on both aspects. Profit sharing/bonus programs have the dual effect of motivating employees to be more productive and to cut costs. The second most common type of profit sharing is rewarding with stock; and as the company does better, the value of the its stock increases in value. According to Bob Nelson (1997), One of the highest forms of recognition is to treat an employee as if he or she is an owner of the company. This represents a long-term commitment to the individual. Stock is usually reserved to motivate high- level managers or key people within most corporations, and a couple of reasons exist for this trend. First, if managers are motivated by a profit-sharing program, they will make decisions that will benefit the corporation long term. Second, most mid-to-lower level employees prefer an immediate reward or incentive like a bonus system previously discussed to reward outstanding effort. Incentive travel. Who would say no to an all-expenses paid luxury holiday? Another effective way to financially motivate employees is with incentive travel. Many times when employees are rewarded with cash bonuses or pay raises, the money is used to pay off debt or everyday types of financial expenses. While money for everyday expenses is good, the added appeal of incentive travel, as a bonus or reward, is that employees would probably never buy something like it for themselves. Paid time-off. Paid time away from work is one of the most common types of financial rewards used to motivate employees. The amount of paid time-off can vary from an extended lunch to multiple days off at the same time. Bob Nelson (1997) suggests how this can be done effectively, If the job permits it, simply give people a task and a deadline and specify the quality you expect. If they finish before the deadline, the extra time is their reward. Non-Financial Motivation This report speaks of emotive forces as internal emotional drives for performing a task. Effective motivation of employees goes beyond the financial compensation for work, and some of the most well-known companies in the world have realized the benefits of appealing to their employees drive to work intelligently and to be recognized. Most motivators lead directly to the empowerment and enabling of people to perform well. Productivity can be improved when a company focuses on the following: goal setting, communication, autonomy, responsibility, and flexibility. Goal-setting. A prime motivator for people is the achievement of objectives and the recognition of peers. Achievement is the successful execution of a task to reach a desired end. Whether employees are working to fasten a bolt to an engine block or developing a competition study, the successful accomplishment of that task represents a piece of the

companys mission (Coffman & Gonzalez-Molina, 2002). Workers that have a clear idea of how their task fits into the larger scheme and profit of a company will feel a sense of belonging and importance because they understand the ultimate end and importance of performing that task (Weinstein, 2002). Setting goals is a good way to define an employees purpose in a company and helps to set a standard for them to gauge their success. Managers can then focus on the success of the individual by illustrating his or her performance in comparison to the goal, either with public or private recognition. In this way, the organization develops an atmosphere of attainment against measurable objectives and becomes energized with each win (Nelson, 1997). The process of defining the roles and objectives of the staff brings an invaluable opportunity for sharing communication between the employee and management. Communication. The flow of information in a company can be a powerful tool in motivating its workforce. Communication of clearly stated goals and paths to achievement is the best way to begin developing employee talent Registering and acting on the communication of employees also gives a powerful message about their value to the company and management Employees want their company and team to succeed; and when management uses the input to help them be productive, a sense of empowerment and ownership of the process develops. The open communication also gives a measure of control over their work environment and allows for the improvement of each individual working situation. The reward employees receive for communicating is not always what managers might View as an award. Communication also gives rise to trust between the supervisors and their staff. Trust enables management to give autonomy and to encourage independence, and that trust builds a strong sense of community for the employee. Autonomy.As the workplace has evolved, the thoughts on worker autonomy have changed as well. It allows employees to act independently to fix problems, improve procedures, or enhance interactions. Independence, when coupled with good communication, motivates the worker to think about the best interests of the company and further motivates by giving the freedom to act in any given situation. Good managers will define the outcomes but avoid narrowing the task into steps for the employee, trusting the employee to perform the job that he or she has been given to do, allow them to use talent and ingenuity to accomplish that task. An employee that is engaged in the decision- making process feels motivated to ensure the project is done according to business objectives Autonomy is also a major driving factor in the effectiveness of an organization. An

organization that is concerned with everyones role in achieving overall objectives is more adaptable and flexible. Employees will take responsibility for achieving goals in a broader context and will have less rigidity in the interpretation of job roles. The lack of rigidity will enable problems to be dealt with more efficiently and will give greater satisfaction and empowerment to each employee. An effective and productive organization is the major insurer of employee retention, satisfaction, and motivation. Responsibility. Employees place a worthwhile job above every other employment concern, including money. Responsibility for the success or failure of a project is a large part of creating job worth, When employees are given the tools and autonomy to do a certain project, or work in a particular role, they are motivated to perform brilliantly because they are accountable for that particular function. Responsibility for a project will also give a good employee the opportunity to display talent and creativity in solving a problem or completing a task. When tasks are clearly outlined to stress individual and group accountability, employees feel that management is putting trust and faith in their abilities to perform. Flexibility. One of the aims of companies should be flexibility with employees. During the 1990s, companies realized tremendous productivity gains by demonstrating flexibility in the work environment. Schedule and organizational flexibility allow employees to balance home and work more effectively and cause productivity and morale gains as well. Just as previously illustrated with McCormick and Company, more hours worked and time clock punching do not necessarily make a company profitable or effective. Flexibility in work scheduling allows work to be arranged according to the individuals need. Many companies illustrate how the flexible schedule gives tremendous returns in employee loyalty, retention, and compensation. One company could not attract desirable applicants because it could not afford the massive benefit and financial compensation packages of the bigger firms. The company management decided to move towards flextime, eradicated time clocks, and invented management by wandering around. Maslows Hierarchy of Needs

Maslows hierarchy of needs is often portrayed in the shape of a pyramid, with the largest and most fundamental levels of needs at the bottom, and the need for self-actualization at the top. The most fundamental and basic four layers of the pyramid contain what Maslow called deficiency needs or d-needs: esteem, friendship and love, security, and physical needs. With the exception of the most fundamental (physiological) needs, if these deficiency needs are not met, the body gives no physical indication but the individual feels anxious and tense. Maslows theory suggests that the most basic level of needs must be met before the individual will strongly desire (or focus motivation upon) the secondary or higher level needs. Maslow also coined the term Met motivation to describe the motivation of people who go beyond the scope of the basic needs and strive for constant betterment. Met motivated people are driven by B-needs (Being Needs), instead of deficiency needs (D-Needs). Job enlargement workers being given a greater variety of tasks to perform (not necessarily more challenging) which should make the work more interesting. Job enrichment involves workers being given a wider range of more complex, interesting and challenging tasks surrounding a complete unit of work. This should give a greater sense of achievement. Empowerment means delegating more power to employees to make their own decisions over areas of their working life. Love and belonging: After physiological and safety needs are fulfilled, the third layer of human needs are social and involve feelings of belongingness. The need is especially

strong in childhood and can over-ride the need for safety as witnessed in children who cling to abusive parents. Deficiencies with respect to this aspect of Maslows hierarchy due to hospitalism, neglect, shunning, ostracism etc. can impact individuals ability to form and maintain emotionally significant relationships in general, such as:

Friendship Intimacy Family

Humans need to feel a sense of belonging and acceptance, whether it comes from a large social group, such as clubs, office culture, religious groups, professional organizations, sports teams, gangs, or small social connections (family members, intimate partners, mentors, close colleagues, confidants). They need to love and be loved (sexually and nonsexually) by others. In the absence of these elements, many people become susceptible to loneliness, social anxiety, and clinical depression. This need for belonging can often overcome the physiological and security needs, depending on the strength of the peer pressure; an anorexic, for example, may ignore the need to eat and the security of health for a feeling of control and belonging Self-actualization What a man can be, he must be. This forms the basis of the perceived need for selfactualization. This level of need pertains to what a persons full potential is and realizing that potential. Maslow describes this desire as the desire to become more and more what one is, to become everything that one is capable of becoming. This is a broad definition of the need for self-actualization, but when applied to individuals the need is specific. For example one individual may have the strong desire to become an ideal parent, in another it may be expressed athletically, and in another it may be expressed in painting, pictures, or inventions. As mentioned before, in order to reach a clear understanding of this level of need one must first not only achieve the previous needs, physiological, safety, love, and esteem, but master these needs. Causality Orientations Theory (COT), the third mini-theory, describes individual differences in peoples tendencies to orient toward environments and regulate behavior in various ways. COT describes and assesses three types of causality orientations: the autonomy orientation in which persons act out of interest in and valuing of what is occurring; the control orientation in which the focus is on rewards, gains, and approval; and the impersonal or motivated orientation characterized by anxiety concerning competence. The two factor theory: Two-factor theory distinguishes between:

Motivators (e.g., challenging work, recognition, responsibility) that give positive satisfaction, arising from intrinsic conditions of the job itself, such as recognition, achievement, or personal growth, Hygiene factors (e.g. status, job security, salary, fringe benefits, work conditions) that do not give positive satisfaction, though dissatisfaction results from their absence. These are extrinsic to the work itself, and include aspects such as company policies, supervisory practices, or wages/salary.

Essentially, hygiene factors are needed to ensure an employee is not dissatisfied. Motivation factors are needed to motivate an employee to higher performance. Herzberg also further classified our actions and how and why we do them, for example, if you perform a work related action because you have to then that is classed as movement, but if you perform a work related action because you want to then that is classed as motivation. Equity theory: Employees evaluate their treatment relative to the treatment of others Inputs: Employee contributions to their jobs Outputs: What employees receive in return The perceived ratio of contribution to return determines perceived equity Theory X and Theory Y Theory X

People are lazy. People lack ambition and dislike responsibility. People are self-centered. People resist change. People are gullible and not very bright.

Theory Y

People are energetic. People are ambitious and seek responsibility. People can be selfless. People want to contribute to business growth and change.

People are intelligent. Reinforcement / Behavior Modification Theory Measurement of employee job performance:

When negative consequences are attached directly to undesirable behavior Positive Reinforcement When rewards are tied directly to performance Recommendation:

Its determining if training is the best method to achieve the desired chances Learning objectives outcomes of training is identified and specified clearly Senior management is committed to why and continued support of learning Easy to take into account culturally conditioned learning system For employees who are taken on for a trial period the measuring performance may determine whether or not their contract is renewed. Joint objective setting and a development approach are positive and participatory, encouraging regular and frequent dialog between managers and individuals, or teams, with a shared result focus, and helping employees to accept their own commit to change and improvement. Performance management focuses on future performance planning and improvement rather than retrospective performance appraisal, so it contributes to an output, customer and flexibility focus. Task that organization provide, it become more easier than the unmanaged procedure. It is a picture of developed, well cultured and well civilized business process.

6.Conclusion It can be said that Nestle is one of the best leading food manufacturing company in our Country. Moreover, the quality of this companys product is world class. We hope that this company will continue their business with lots of good food and bakeries. And also we are wishing that they will increase their branches all over the world. In addition, it can be observed that it creates a lot of employment facilities in our Country. For this reasons, we are proud of this company.

7.3. Motivating Employees

Learning Objective
1. Define motivation and describe several theories of motivation. Motivation refers to an internally generated drive to achieve a goal or follow a particular course of action. Highly motivated employees focus their efforts on achieving specific goals; those who are unmotivated dont. Its the managers job, therefore, to motivate employeesto get them to try to do the best job they can. But what motivates employees to do well? How does a manager encourage employees to show up for work each day and do a good job? Paying them helps, but many other factors influence a persons desire (or lack of it) to excel in the workplace. What are these factors? Are they the same for everybody? Do they change over time? To address these questions, well examine four of the most influential theories of motivation: hierarchy-of-needs theory, two-factor theory, expectancy theory, and equity theory.

Hierarchy-of-Needs Theory
Psychologist Abraham Maslows hierarchy-of-needs theory proposed that we are motivated by the five unmet needs, arranged in the hierarchical order shown in Figure 7.4, Maslows Hierarchy-of-Needs Theory, which also lists examples of each type of need in both the personal and work spheres of life. Look, for instance, at the list of personal needs in the left-hand column. At the bottom are physiological needs (such life-sustaining needs as food and shelter). Working up the hierarchy we experience safety needs (financial stability, freedom from physical harm), social needs (the need to belong and have friends), esteem needs (the need for self-respect and status), and selfactualization needs (the need to reach ones full potential or achieve some creative success). Figure 7.4. Maslows Hierarchy-of-Needs Theory

There are two things to remember about Maslows model: 1. We must satisfy lower-level needs before we seek to satisfy higher-level needs. 2. Once weve satisfied a need, it no longer motivates us; the next higher need takes its place. Lets say, for example, that youve just returned to college and that for a variety of reasons that arent your fault, youre broke, hungry, and homeless. Because youll probably take almost any job that will pay for food and housing (physiological needs), you go to work repossessing cars. Fortunately, your student loan finally comes through, and with enough money to feed yourself, you can look for a job thats not so risky (a safety need). You find a job as a night janitor in the library, and though you feel secure, you start to feel cut off from your friends, who are active during daylight hours. You want to work among people, not books (a social need). So now you join several of your friends selling pizza in the student center. This job improves your social life, but even though youre very good at making pizzas, its not terribly satisfying. Youd like something that will let you display your intellectual talents (an esteem need). So you study hard and land a job as an intern in the governors office. On graduation, you move up through a series of government appointments and eventually run for state senator. As youre sworn into office, you realize that youve reached your full potential (a selfactualization need) and you comment to yourself, It doesnt get any better than this.

Needs Theory and the Workplace

Figure 7.5.

Employees are motivated by different factors. For some, the ability to have fun at work is a priority. What implications does Maslows theory have for business managers? There are two key points: (1) Not all employees are driven by the same needs and (2) the needs that motivate individuals can change over time. Managers should consider which needs different employees are trying to satisfy and should structure rewards and other forms of recognition accordingly. For example, when you got your first job repossessing cars, you were motivated by the need for money to buy food. If youd been given a choice between a raise or a plaque recognizing your accomplishments, youd undoubtedly have opted for the money. As a state senator, by contrast, you may prefer public recognition of work well done (say, election to higher office) to a pay raise.

Two-Factor Theory
Another psychologist, Frederick Herzberg, set out to determine which work factors (such as wages, job security, or advancement) made people feel good about their jobs and which factors made them feel bad about their jobs. He surveyed workers, analyzed the results, and concluded that to understand employee satisfaction (or dissatisfaction), he had to divide work factors into two categories:

Motivation factors. Those factors that are strong contributors to job satisfaction Hygiene factors. Those factors that are not strong contributors to satisfaction but that must be present to meet a workers expectations and prevent job dissatisfaction

Figure 7.6, Herzbergs Two-Factor Theory illustrates Herzbergs two-factor theory. Note that motivation factors (such as promotion opportunities) relate to the nature of the work itself and the way the employee performs it. Hygiene factors (such as physical working conditions) relate to the environment in which its performed. (Note, too, the

similarity between Herzbergs motivation factors and Maslows esteem and selfactualization needs.) Figure 7.6. Herzbergs Two-Factor Theory

Two-Factor Theory and the Workplace

Well ask the same question about Herzbergs model as we did about Maslows: What does it mean for managers? Suppose youre a senior manager in an accounting firm, where you supervise a team of accountants, each of whom has been with the firm for five years. How would you use Herzbergs model to motivate the employees who report to you? Lets start with hygiene factors. Are salaries reasonable? What about working conditions? Does each accountant have his or her own workspace, or are they crammed into tiny workrooms? Are they being properly supervised or are they left on their own to sink or swim? If hygiene factors like these dont meet employees expectations, they may be dissatisfied with their jobs. As you can see in Figure 7.6, Herzbergs Two-Factor Theory, fixing problems related to hygiene factors may alleviate job dissatisfaction, but it wont necessarily improve anyones job satisfaction. To increase satisfaction (and motivate someone to perform better), you must address motivation factors. Is the work itself challenging and stimulating? Do employees receive recognition for jobs well done? Will the work that an accountant has been assigned help him or her to advance in the firm? According to Herzberg, motivation requires a twofold approach: eliminating dissatisfiers and enhancing satisfiers.

Expectancy Theory
If you were a manager, wouldnt you like to know how your employees decide to work hard or goof off? Wouldnt it be nice to know whether a planned rewards program will have the desired effectnamely, motivating them to perform better in their jobs?

Wouldnt it be helpful if you could measure the effect of bonuses on employee productivity? These are the issues considered by psychologist Victor Vroom in his expectancy theory, which proposes that employees will work hard to earn rewards that they value and that they consider obtainable. As you can see from Figure 7.7, Vrooms Expectancy Theory, Vroom argues that an employee will be motivated to exert a high level of effort to obtain a reward under three conditions: 1. The employee believes that his or her efforts will result in acceptable performance. 2. The employee believes that acceptable performance will lead to the desired outcome or reward. 3. The employee values the reward. Figure 7.7. Vrooms Expectancy Theory

Expectancy Theory and the Workplace

To apply expectancy theory to a real-world situation, lets analyze an automobileinsurance company with one hundred agents who work from a call center. Assume that the firm pays a base salary of $2,000 a month, plus a $200 commission on each policy sold above ten policies a month. In terms of expectancy theory, under what conditions would an agent be motivated to sell more than ten policies a month? 1. The agent would have to believe that his or her efforts would result in policy sales (that, in other words, theres a positive link between effort and performance). 2. The agent would have to be confident that if he or she sold more than ten policies in a given month, there would indeed be a bonus (a positive link between performance and reward). 3. The bonus per policy$200would have to be of value to the agent.

Now lets alter the scenario slightly. Say that the company raises prices, thus making it harder to sell the policies. How will agents motivation be affected? According to expectancy theory, motivation will suffer. Why? Because agents may be less confident that their efforts will lead to satisfactory performance. What if the company introduces a policy whereby agents get bonuses only if buyers dont cancel policies within ninety days? How will this policy affect motivation? Now agents may be less confident that theyll get bonuses even if they do sell more than ten policies. Motivation will decrease because the link between performance and reward has been weakened. Finally, what will happen if bonuses are cut from $200 to $25? Obviously, the reward would be of less value to agents, and, again, motivation will suffer. The message of expectancy theory, then, is fairly clear: managers should offer rewards that employees value, set performance levels that they can reach, and ensure a strong link between performance and reward.

Equity Theory
What if you spent thirty hours working on a class report, did everything you were supposed to do, and handed in an excellent assignment (in your opinion). Your roommate, on the other hand, spent about five hours and put everything together at the last minute. You know, moreover, that he ignored half the requirements and never even ran his assignment through a spell-checker. A week later, your teacher returns the reports. You get a C and your roommate gets a B+. In all likelihood, youll feel that youve been treated unfairly relative to your roommate. Your reaction makes sense according to the equity theory of motivation, which focuses on our perceptions of how fairly were treated relative to others. Applied to the work environment, this theory proposes that employees analyze their contributions or job inputs (hours worked, education, experience, work performance) and their rewards or job outcomes (salary, benefits, recognition). Then they create a contributions/rewards ratio and compare it to those of other people. The basis of comparison can be any one of the following:

Someone in a similar position Someone holding a different position in the same organization Someone with a similar occupation Someone who shares certain characteristics (such as age, education, or level of experience) Oneself at another point in time

When individuals perceive that the ratio of their contributions to rewards is comparable to that of others, they perceive that theyre being treated equitably; when they perceive that the ratio is out of balance, they perceive inequity. Occasionally, people will perceive that theyre being treated better than others. More often, however, they conclude that others are being treated better (and that they themselves are being treated worse). This is

what you concluded when you saw your grade. Youve calculated your ratio of contributions (hours worked, research and writing skills) to rewards (project grade), compared it to your roommates ratio, and concluded that the two ratios are out of balance. What will an employee do if he or she perceives an inequity? The individual might try to bring the ratio into balance, either by decreasing inputs (working fewer hours, refusing to take on additional tasks) or by increasing outputs (asking for a raise). If this strategy fails, an employee might complain to a supervisor, transfer to another job, leave the organization, or rationalize the situation (perhaps deciding that the situation isnt so bad after all). Equity theory advises managers to focus on treating workers fairly, especially in determining compensation, which is, naturally, a common basis of comparison.

Key Takeaways

Motivation describes an internally generated drive that propels people to achieve goals or pursue particular courses of action. There are four influential theories of motivation: hierarchy-of-needs theory, twofactor theory, expectancy theory, and equity theory. Hierarchy-of-needs theory proposes that were motivated by five unmet needs physiological, safety, social, esteem, and self-actualization and must satisfy lower-level needs before we seek to satisfy higher-level needs. Two-factor theory divides work factors into motivation factors (those that are strong contributors to job satisfaction) and hygiene factors (those that, though not strong contributors to satisfaction, must be present to prevent job dissatisfaction). To increase satisfaction (and motivate someone to perform better), managers must address motivation factors. Expectancy theory proposes that employees work hard to obtain a reward when they value the reward, believe that their efforts will result in acceptable performance, and believe that acceptable performance will lead to a desired outcome or reward. Equity theory focuses on our perceptions of how fairly were treated relative to others. This theory proposes that employees create contributions/rewards ratios that they compare to those of others. If they feel that their ratios are comparable to those of others, theyll perceive that theyre being treated equitably.

Exercise
This chapter describes four theories of motivation: hierarchy-of-needs theory, two-factor theory, expectancy theory, and equity theory. Briefly describe each theory. Which one makes the most intuitive sense to you? Why do you find it appealing?