Richard L. Daft - Management. 9th ed., 2010

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Chapter Outline

Learning Outcomes

After studying this chapter, you should be able to:

1. Deﬁ ne mo

tivation and explain the difference between intrinsic and extrin-

sic rewards.

2. Identify and describe content theories of motivation based on employee

needs.

3. Identify and explain process theories of motivation.

4. Describe the reinforcement perspective and how it can be used to moti-

vat

e employees.

5. Discuss major approaches to job design and how job design inﬂ uences

motivation.

6. Explain how empowerment heightens employee motivation.

7. Describe ways that managers can create a sense of meaning and impor-

ance through employee engagement.

Are You Engaged or Disengaged?

The Concept of Motivation

Content Perspectives on Motivation

The Hierarchy of Needs

ERG Theory

A Two-Factor Approach to Motivation

Acquired Needs

Process Perspectives on Motivation

Goal Setting

Equity Theory

Expectancy Theory

New Manager Self-Test: Your Approach to

Motivating Others

Reinforcement Perspective on Motivation

Job Design for Motivation

Job Simpliﬁ cation

Job Rotation

Job Enlargement

Job Enrichment

Job Characteristics Model

Innovative Ideas for Motivating

Empowering People to Meet Higher Needs

Giving Meaning to Work Through

Engagement

441

Controlling

Planning

Environment

Organizing

Leading

Introduction

Motivating Employees

ARE YOU ENGAGED OR DISENGAGED?

The term employee engagement is becoming popular in the

corporate world. To learn what engagement means, answer

the following questions twice—(1) once for a course you

both enjoyed and performed well and (2) a second time for

a course you did not enjoy and performed poorly. Please

mark a “1” to indicate whether each item is Mostly True

or Mostly False for the course you enjoyed and performed

well. Please mark a “2” to indicate whether each item is

Mostly True or Mostly False for the course you did not

enjoy and performed poorly.

Mostly

True

Mostly

False

1. I made sure to study on a regular

basis.

2. I put forth effort.

3. I found ways to make the course

material relevant to my life.

4. I found ways to make the course

interesting to me.

5. I raised my hand in class.

6. I had fun in class.

7. I participated actively in small

group discussions.

8. I helped fellow students.

SCORING AND INTERPRETATION: Engagement

means that people involve and express themselves in

their work, going beyond the minimum effort required.

Engagement typically has a positive relationship with

both personal satisfaction and performance. If this rela-

tionship was true for your classes, the number of “1s” in

the Mostly True column will be higher than the number of

“2s.” You might expect a score of 6 or higher for a course

in which you were engaged, and possibly 3 or lower if you

were disengaged.

The challenge for a new manager is to learn to engage

subordinates in the same way your instructors in your

favorite classes were able to engage you. Teaching is simi-

lar to managing. What techniques did your instructors

use to engage students? Which techniques can you use to

engage people when you become a new manager?

Most people begin a new job with energy and enthusiasm, but employees can lose

their drive if managers fail in their role as motivators. It can be a problem for even

the most successful of organizations and the most admired of managers, when expe-

rienced, valuable employees lose the motivation and commitment they once felt,

causing a decline in their performance. One secret for success in organizations is

motivated and engaged employees.

Motivation is a challenge for managers because motivation arises from within

employees and typically differs for each person. For example, Janice Rennie makes

$350,000 a year selling residential real estate in Toronto; she attributes her success to

the fact that she likes to listen carefully to clients and then  nd houses to meet their

needs. Greg Storey is a skilled machinist who is challenged by writing programs

for numerically controlled machines. After dropping out of college, he swept  oors

in a machine shop and was motivated to learn to run the machines. Frances Blais

sells educational books and software. She is a top salesperson, but she doesn’t care

about the $50,000-plus commissions: “I’m not even thinking money when I’m selling.

I’m really on a crusade to help children read well.” In stark contrast, Rob Michaels

gets sick to his stomach before he goes to work. Rob is a telephone salesperson who

spends all day trying to get people to buy products they do not need, and the rejec-

tions are painful. His motivation is money; he earned $120,000 in the past year and

cannot make nearly that much doing anything else.

PART 5 LEADING442

Rob is motivated by money, Janice by her love of listening and problem solving,

Frances by the desire to help children read, and Greg by the challenge of mastering

numerically controlled machinery. Each person is motivated to perform, yet each has

different reasons for performing. With such diverse motivations among individuals,

how do managers  nd the right way to motivate employees toward common orga-

nizational goals?

This chapter reviews several approaches to employee motivation. First, we de ne

motivation and the types of rewards managers use. Then, we examine several models

that describe the employee needs and processes associated with motivation. We also

look at the use of reinforcement for motivation, as well as examine how job design—

changing the structure of the work itself—can affect employee satisfaction and pro-

ductivity. Finally, we discuss the trend of empowerment and look at how managers

imbue work with a sense of meaning by fostering employee engagement.

THE CONCEPT OF MOTIVATION

Most of us get up in the morning, go to school or work, and behave in ways that are

predictably our own. We respond to our environment and the people in it with little

thought as to why we work hard, enjoy certain classes, or  nd some recreational activ-

ities so much fun. Yet all these behaviors are motivated by something. Motivation

refers to the forces either within or external to a person that arouse enthusiasm and

persistence to pursue a certain course of action. Employee motivation affects produc-

tivity, and part of a manager’s job is to channel motivation toward the accomplish-

ment of organizational goals.

The study of motivation helps managers understand

what prompts people to initiate action, what in uences their choice of action, and

why they persist in that action over time.

A simple model of human motivation is illustrated in Exhibit 15.1. People have

needs—such as for recognition, achievement, or monetary gain—that translate into

an internal tension that motivates speci c behaviors with which to ful ll the need.

To the extent that the behavior is successful,

the person is rewarded in the sense that the

need is satis ed. The reward also informs

the person that the behavior was appropri-

ate and can be used again in the future.

Rewards are of two types: intrinsic and

extrinsic. Intrinsic rewards are the satis-

factions a person receives in the process of

performing a particular action. The comple-

tion of a complex task may bestow a pleas-

ant feeling of accomplishment, or solving

a problem that bene ts others may ful ll a

personal mission. Frances Blais sells edu-

cational materials for the intrinsic reward

of helping children read well.

Extrinsic

rewards are given by another person, typi-

cally a manager, and include promotions,

pay increases, and bonuses. They originate

externally, as a result of pleasing others. Rob

Michaels, who hates his sales job, neverthe-

less is motivated by the extrinsic reward of

high pay. Although extrinsic rewards are

important, good managers strive to help

people achieve intrinsic rewards as well.

The most talented and innovative employees

are rarely motivated exclusively by rewards

The Container Store has the motto that one great

person equals three good people. Here, an employee and Elfa storage system designer

works with a couple to design a custom storage plan. Getting hired is quite competitive

at the retailer that has been on Fortune magazine’s list of 100 Best Companies to

Work for in America year after year since 2000. Employees get intrinsic rewards from

knowing they were selected to work for this winning company. The Container Store

also puts its money where its motto is—providing the extrinsic rewards of entry level

pay that is 50 to 100 percent higher than average retail pay, a 40 percent merchandise

discount, and health insurance for part-time as well as full-time employees.

PHOTO COURTESY OF THE CONTAINER STORE

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CHAPTER 15 MOTIVATING EMPLOYEES 443

Leading

such as money and bene ts, or even praise and recognition. Instead, they seek satisfac-

tion from the work itself.

For example, at Google, people are motivated by an idealistic

goal of providing “automated universal transference,” which basically means unifying

data and information around the world and totally obliterating language barriers via

the Internet. People are energized by the psychic rewards they get from working on

intellectually stimulating and challenging technical problems, as well as by the poten-

tially bene cial global impact of their work.

As a new manager, remember that people will be more engaged when they do things

they really like. To reinforce this understanding, refer back to your answers on the

questionnaire at the beginning of this chapter.

The importance of motivation as illustrated in Exhibit 15.1 is that it can lead to

behaviors that re ect high performance within organizations. Studies have found

that high employee motivation goes hand-in-hand with high organizational perfor-

mance and pro ts.

It is the responsibility of managers to  nd the right combination

of motivational techniques and rewards to satisfy employees’ needs and simultane-

ously encourage high work performance.

Some ideas about motivation, referred to as content theories, stress the analysis of

underlying human needs and how needs can be satis ed in the workplace. Process

theories concern the thought processes that in uence behavior. They focus on how

people seek rewards in work circumstances. Reinforcement theories focus on employee

learning of desired work behaviors. In Exhibit 15.1, content theories focus on the

concepts in the  rst box, process theories on those in the second, and reinforcement

theories on those in the third.

CONTENT PERSPECTIVES ON MOTIVATION

Content theories emphasize the needs that motivate people. At any point in time,

people have a variety of needs. These needs translate into an internal drive that

motivates specific behaviors in an attempt to fulfill the needs. In other words,

our needs are like a hidden catalog of the things we want and will work to get. To

the extent that managers understand employees’ needs, they can design reward

systems to meet them and direct employees’ energies and priorities toward

attaining organizational goals.

The Hierarchy of Needs

Probably the most famous content theory was developed by Abraham Maslow.

Maslow’s hierarchy of needs theory proposes that people are motivated by multiple

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EXHIBIT 15.1 A Simple Model of Motivation

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PART 5 LEADING444

needs and that these needs exist in a hierarchical order, as illustrated in Exhibit 15.2.

Maslow identi ed  ve general types of motivating needs in order of ascendance:

1. Physiological needs. These most basic human physical needs include food, water,

and oxygen. In the organizational setting, they are re ected in the needs for ade-

quate heat, air, and base salary to ensure survival.

2. Safety needs. These needs include a safe and secure physical and emotional envi-

ronment and freedom from threats—that is, for freedom from violence and for an

orderly society. In an organizational workplace, safety needs re ect the needs for

safe jobs, fringe bene ts, and job security.

3. Belongingness needs. These needs re ect the desire to be accepted by one’s peers,

have friendships, be part of a group, and be loved. In the organization, these

needs in uence the desire for good relationships with coworkers, participation in

a work group, and a positive relationship with supervisors.

4. Esteem needs. These needs relate to the desire for a positive self-image and to

receive attention, recognition, and appreciation from others. Within organiza-

tions, esteem needs re ect a motivation for recognition, an increase in responsi-

bility, high status, and credit for contributions to the organization.

5. Self-actualization needs. These needs include the need for self-ful llment, which is

the highest need category. They concern developing one’s full potential, increasing

one’s competence, and becoming a better person. Self-actualization needs can be

met in the organization by providing people with opportunities to grow, be creative,

and acquire training for challenging assignments and advancement.

According to Maslow’s theory, low-order needs take priority—they must be sat-

is ed before higher-order needs are activated. The needs are satis ed in sequence:

Physiological needs come before safety needs, safety needs before social needs, and

so on. A person desiring physical safety will devote his or her efforts to securing a

safer environment and will not be concerned with esteem needs or self-actualization

needs. Once a need is satis ed, it declines in importance and the next higher need is

activated.

A study of employees in the manufacturing department of a major health-care

company in the United Kingdom provides some support for Maslow’s theory. Most

line workers emphasized that they worked at the company primarily because of the

good pay, bene ts, and job security. Thus, employees’ lower-level physiological and

safety needs were being met. When questioned about their motivation, employees

indicated the importance of positive social relationships with both peers and super-

visors (belongingness needs) and a desire for greater respect and recognition from

management (esteem needs).

EXHIBIT 15.2 Maslow’s Hierarchy of Needs

CHAPTER 15 MOTIVATING EMPLOYEES 445

Leading

As a new manager, recognize that some people are motivated primarily to satisfy

lower-level physiological and safety needs, while others want to satisfy higher-level

needs. Learn which lower- and higher-level needs motivate you by completing the

experiential exercise on pages 463–464.

ERG Theory

Clayton Alderfer proposed a modi cation of Maslow’s theory in an effort to simplify

it and respond to criticisms of its lack of empirical veri cation.

His ERG theory iden-

ti ed three categories of needs:

1. Existence needs. The needs for physical well-being.

2. Relatedness needs. The needs for satisfactory relationships with others.

3. Growth needs. The needs that focus on the development of human potential and

the desire for personal growth and increased competence.

The ERG model and Maslow’s need hierarchy are similar because both are in hier-

archical form and presume that individuals move up the hierarchy one step at a time.

However, Alderfer reduced the number of need categories to three and proposed

that movement up the hierarchy is more complex, re ecting a frustration-regression

principle, namely, that failure to meet a high-order need may trigger a regression

to an already ful lled lower-order need. Thus, a worker who cannot ful ll a need

for personal growth may revert to a lower-order need and redirect his or her efforts

toward making a lot of money. The ERG model therefore is less rigid than Maslow’s

need hierarchy, suggesting that individuals may move down as well as up the hierar-

chy, depending on their ability to satisfy needs.

Need hierarchy theory helps explain why organizations  nd ways to recognize

employees, encourage their participation in decision making, and give them oppor-

tunities to make signi cant contributions to the organization and society. At Sterling

Bank, with headquarters in Houston, Texas, there are no bank tellers. These positions

are now front-line managers who have the opportunity to make decisions and con-

tribute ideas for improving the business.

USAA, which offers insurance, mutual

funds, and banking services to  ve million members of the military and their fami-

lies, provides another example.

USAA’s customer service agents are on the front lines in helping families challenged by war

and overseas deployment manage their ﬁ nancial responsibilities. Managers recognize that

the most important factor in the company’s success is the relationship between USAA mem-

bers and these front-line employees.

To make sure that relationship is a good one, USAA treats customer service reps, often

considered the lowest rung on the corporate ladder, like valued professionals. People have a

real sense that they’re making life just a little easier for military members and their families,

which gives them a feeling of pride and importance. Employees are organized into small,

tightly knit “expert teams” and are encouraged to suggest changes that will beneﬁ t custom-

ers. Service reps don’t have scripts to follow, and calls aren’t timed. Employees know they can

take whatever time they need to give the customer the best possible service.

Giving people the opportunity to make genuine contributions has paid off. In a study by

Forrester Research, 81 percent of USAA customers said they believe the company does what’s

best for them, rather than what’s best for the bottom line. Compare that to about 20 percent

of customers for other ﬁ nancial services ﬁ rms.

A recent survey found that employees who contribute ideas at work, such as cus-

tomer service reps at USAA, are more likely to feel valued, committed, and motivated.

In addition, when employees’ ideas are implemented and recognized, a motivational

effect often ripples throughout the workforce.

Many companies are  nding that creating a humane work environment that allows

people to achieve a balance between work and personal life is also a great high-level

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PART 5 LEADING446

motivator. Flexibility in the workplace, including options such as telecommuting,

 exible hours, and job sharing, is highly valued by today’s employees because it

enables them to manage their work and personal responsibilities. Flexibility is good

for organizations too. Employees who have control over their work schedules are

signi cantly less likely to suffer job burnout and are more highly committed to their

employers, as shown in Exhibit 15.3. This idea was supported by a survey conducted

at Deloitte, which found that client service professionals cited workplace  exibility as

a strong reason for wanting to stay with the  rm. Another study at Prudential Insur-

ance found that work-life satisfaction and work  exibility directly correlated to job

satisfaction, organizational commitment, and employee retention.

A Two-Factor Approach to Motivation

Frederick Herzberg developed another popular theory of motivation called the two-

factor theory.

Herzberg interviewed hundreds of workers about times when they

were highly motivated to work and other times when they were dissatis ed and

unmotivated. His  ndings suggested that the work characteristics associated with

dissatisfaction were quite different from those pertaining to satisfaction, which

prompted the notion that two factors in uence work motivation.

The two-factor theory is illustrated in Exhibit 15.4. The center of the scale is neu-

tral, meaning that workers are neither satis ed nor dissatis ed. Herzberg believed

that two entirely separate dimensions contribute to an employee’s behavior at work.

The  rst, called hygiene factors, involves the presence or absence of job dissatis ers,

such as working conditions, pay, company policies, and interpersonal relationships.

When hygiene factors are poor, work is dissatisfying. However, good hygiene factors

simply remove the dissatisfaction; they do not in themselves cause people to become

highly satis ed and motivated in their work.

The second set of factors does in uence job satisfaction. Motivators focus on

high-level needs and include achievement, recognition, responsibility, and oppor-

tunity for growth. Herzberg believed that when motivators are absent, workers are

neutral toward work, but when motivators are present, workers are highly motivated

and satis ed. Thus, hygiene factors and motivators represent two distinct factors that

in uence motivation. Hygiene factors work only in the area of dissatisfaction. Unsafe

working conditions or a noisy work environment will cause people to be dissatis-

 ed, but their correction will not lead to a high level of motivation and satisfaction.

Motivators such as challenge, responsibility, and recognition must be in place before

employees will be highly motivated to excel at their work.

SOURCE: WFD Consulting data, as reported in Karol Rose,

“Work-Life Effectiveness,” Fortune (September 29, 2003): S1–S17.

EXHIBIT 15.3

The Motivational Beneﬁ ts

of Job Flexibility

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CHAPTER 15 MOTIVATING EMPLOYEES 447

Leading

The implication of the two-factor theory for managers is clear. On one hand, provid-

ing hygiene factors will eliminate employee dissatisfaction but will not motivate workers

to high achievement levels. On the other hand, recognition, challenge, and opportuni-

ties for personal growth are powerful motivators and will promote high satisfaction and

performance. The manager’s role is to remove dissatis ers—that is, to provide hygiene

factors suf cient to meet basic needs—and then to use motivators to meet higher-level

needs and propel employees toward greater achievement and satisfaction.

Acquired Needs

The acquired needs theory, developed by David McClelland, proposes that certain types

of needs are acquired during the individual’s lifetime. In other words, people are not

born with these needs but may learn them through their life experiences.

The three

needs most frequently studied are these:

1. Need for achievement. The desire to accomplish something dif cult, attain a high

standard of success, master complex tasks, and surpass others.

2. Need for af liation. The desire to form close personal relationships, avoid con-

 ict, and establish warm friendships.

3. Need for power. The desire to in uence or control others, be responsible for oth-

ers, and have authority over others.

Early life experiences typically determine whether people acquire these needs.

If children are encouraged to do things for themselves and receive reinforcement,

they will acquire a need to achieve. If they are reinforced for forming warm human

relationships, they will develop a need for af liation. If they get satisfaction from

controlling others, they will acquire a need for power.

For more than 20 years, McClelland studied human needs and their implications

for management. People with a high need for achievement are frequently entrepre-

neurs. People who have a high need for af liation are successful integrators, whose

job is to coordinate the work of several departments in an organization.

Integrators

include brand managers and project managers who must have excellent people skills.

A high need for power often is associated with successful attainment of top levels in the

EXHIBIT 15.4

Herzberg’s Two-Factor

Theory

PART 5 LEADING448

organizational hierarchy. For example, McClelland studied managers at AT&T for 16

years and found that those with a high need for power were more likely to follow a path

of continued promotion over time. More than half of the employees at the top levels

had a high need for power. In contrast, managers with a high need for achievement but

a low need for power tended to peak earlier in their careers and at a lower level. The

reason is that achievement needs can be met through the task itself, but power needs

can be met only by ascending to a level at which a person has power over others.

In summary, content theories focus on people’s underlying needs and label those

particular needs that motivate behavior. The hierarchy of needs theory, the ERG the-

ory, the two-factor theory, and the acquired needs theory all help managers under-

stand what motivates people. In this way, managers can design work to meet needs

and hence elicit appropriate and successful work behaviors.

PROCESS PERSPECTIVES ON MOTIVATION

Process theories explain how people select behavioral actions to meet their needs

and determine whether their choices were successful. Important perspectives in this

area include goal-setting, equity theory, and expectancy theory.

Goal-Setting

Recall from Chapter 6 our discussion of the importance

and purposes of goals. Numerous studies have shown that

speci c, challenging targets signi cantly enhance people’s

motivation and performance levels.

You have probably

noticed in your own life that you are more motivated

when you have a speci c goal, such as making an A on a

 nal exam, losing 10 pounds before spring break, or earn-

ing enough money during the summer to buy a used car.

Goal-setting theory, described by Edwin Locke and

Gary Latham, proposes that managers can increase motiva-

tion and enhance performance by setting speci c, challeng-

ing goals, then helping people track their progress toward

goal achievement by providing timely feedback. Key com-

ponents of goal-setting theory include the following:

▪ Goal speci city refers to the degree to which goals are

concrete and unambiguous. Speci c goals such as “visit

one new customer each day,” or “sell $1,000 worth of

merchandise a week” are more motivating than vague

goals such as “keep in touch with new customers” or

“increase merchandise sales.” For example, a lack of

clear, speci c goals is cited as a major cause of the failure

of pay-for-performance incentive plans in many organi-

zations.

Vague goals can be frustrating for employees.

▪ In terms of goal dif culty, hard goals are more motivat-

ing than easy ones. Easy goals provide little challenge

for employees and don’t require them to increase their

output. Highly ambitious but achievable goals ask

people to stretch their abilities and provide a basis for

greater feelings of accomplishment and personal effec-

tiveness. A study in Germany found that, over a three-

year period, only employees who perceived their goals

as dif cult reported increases in positive emotions and

feelings of job satisfaction and success.

At Computerized Facility Integra-

tion, clear, speciﬁ c goals enhance employee motivation and

commitment. CFI’s turnover is 4 percent, dramatically lower than

the industry average of 30 percent. Every employee—from clerical

help to senior management—receives a monthly bonus for meeting

established targets. “It varies by role, of course, but we clearly

state what everyone should be achieving, and we reward people

accordingly,” says founder and CEO Robert Verdun. “One of the

big advantages of this bonus system is that it obliges us to keep

communicating.” The Southﬁ eld, Michigan, company installs and

services technology systems in ofﬁ ce buildings and factories.

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CHAPTER 15 MOTIVATING EMPLOYEES 449

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▪ Goal acceptance means that employees have to “buy into” the goals and be committed

to them. Having people participate in setting goals is a good way to increase accep-

tance and commitment. At Aluminio del Caroni, a state-owned aluminum com-

pany in southeastern Venezuela, plant workers felt a renewed sense of commitment

when top leaders implemented a co-management initiative that has managers and

lower-level employees working together to set budgets, determine goals, and make

decisions. “The managers and the workers are running this business together,” said

one employee who spends his days shoveling molten aluminum down a channel

from an industrial oven to a cast. “It gives us the motivation to work hard.”

▪ Finally, the component of feedback means that people get information about how

well they are doing in progressing toward goal achievement. It is important for

managers to provide performance feedback on a regular, ongoing basis. However,

self-feedback, where people are able to monitor their own progress toward a goal,

has been found to be an even stronger motivator than external feedback.

Why does goal setting increase motivation? For one thing, it enables people to

focus their energies in the right direction. People know what to work toward, so

they can direct their efforts toward the most important activities to accomplish the

goals. Goals also energize behavior because people feel compelled to develop plans

and strategies that keep them focused on achieving the target. Speci c, dif cult goals

provide a challenge and encourage people to put forth high levels of effort. In addi-

tion, when goals are achieved, pride and satisfaction increase, contributing to higher

motivation and morale.

As a new manager, use speciﬁ c, challenging goals to keep people focused and motivated.

Have team members participate in setting goals and determining how to achieve them.

Give regular feedback on how people are doing.

Equity Theory

Equity theory focuses on individuals’ perceptions of how fairly they are treated com-

pared with others. Developed by J. Stacy Adams, equity theory proposes that people

are motivated to seek social equity in the rewards they expect for performance.

According to equity theory, if people perceive their compensation as equal to

what others receive for similar contributions, they will believe that their treatment is

fair and equitable. People evaluate equity by a ratio of inputs to outcomes. Inputs to

a job include education, experience, effort, and ability. Outcomes from a job include

pay, recognition, bene ts, and promotions. The input-to-outcome ratio may be com-

pared to another person in the work group or to a perceived group average. A state of

equity exists whenever the ratio of one person’s outcomes to inputs equals the ratio

of another’s outcomes to inputs.

Inequity occurs when the input-to-outcome ratios are out of balance, such as

when a new, inexperienced employee receives the same salary as a person with a

high level of education or experience. Interestingly, perceived inequity also occurs

in the other direction. Thus, if an employee discovers she is making more money

than other people who contribute the same inputs to the company, she may feel the

need to correct the inequity by working harder, getting more education, or consider-

ing lower pay. Studies of the brain have shown that people get less satisfaction from

money they receive without having to earn it than they do from money they work to

receive.

Perceived inequity creates tensions within individuals that motivate them

to bring equity into balance.

The most common methods for reducing a perceived inequity are these:

▪ Change work effort. A person may choose to increase or decrease his or her inputs

to the organization. Individuals who believe they are underpaid may reduce their

level of effort or increase their absenteeism. Overpaid people may increase effort

on the job.

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