To determine the relevance of motivation theories within the current organizational settings and effect of reward on employee motivation. Illustrate your essay with specific examples.

Introduction to Motivation

Extant research in social as well as consumer psychology has examined the mechanics of motivation through a variety of lenses including rewards and incentives (Deci 1971; Kivetz 2005), drive reduction theory (Hull 1951; Mowrer 1960) and hedonic versus utilitarian motives (Shiv and Fedorikhin 1999; Dhar and Wertenbroch 2000; Kivetz and Simonson 2002). The basic concept of motivation refers to internal factors that impel action and to external factors that can act as inducements to action (Troetschel, 2001). The three aspects of action that motivation can affect are direction (choice), intensity (effort), and duration (persistence). Motivation can not only affect the acquisition of people’s skills and abilities but also how and to what extent they utilize their skills and abilities (Kivetz, 2005). The level of motivation an individual and/or team applies can affect all aspects of organizational results, Knowing this, it is in the manager’s best interest to understand the reason for de-motivation in order to achieve project success through the creation and maintenance of a motivating environment for all members of the team (Donaldson, 2000).

Motivation Defined

In psychology, motivation refers to the initiation, direction, intensity and persistence of behavior (Hackman & Oldham, 2000). Argyris (1957) defines motivation as a concept used when forces acting on or within an individual to initiate and direct behavior are described. For the purpose of this research, motivation means the desire and willingness to achieve personal and organziational goals.

Motivation Theories

The purpose of motivation theories is to help explain the “why” of human behaviour (Kanfer & Ackerman, 1989). The objective of these theories is to create an environment for individuals and work groups to function efficiently. Various researches have been conducted in the field of motivation and its link to employee performance and productivity. One of the first behavior approach to management was proposed by Maslow in 1943 (this was preceded by the scientific management principles proposed by Taylor and Weber in the 19th century). The objective of the behavior approach was to identify the different factors that motivated people to make them more productive. Maslow (1943) put forward the ‘hierarchy of needs theory’ which saw human needs in the form of a hierarchy, ascending from lowest to the highest. He argued that needs must be satisfied in priority order and stated that the lower level needs should be satisfied before the higher level needs and once the lower level needs are satisfied, they no longer serve as a motivator.

Maslow’s five needs can be broken down into

1. Physiological needs – Maslow defined these as the most basic needs important for sustenance. The needs included basic needs such as food, water, warmth, shelter, sleep. It was argued that these needs have to be satisfied before any other need.
2. Safety or Security needs – These were another set of basic needs which included freedom from physical and emotional harm. These needs related to fear of losing a job, property, insecurity and instability in day to day events.
3. Social Needs – By social needs, Maslow pointed to the need for affection and belongingness. Maslow’s belief was that the most basic need for social acceptance needed to be satisfied before other needs such as esteem and self-actualization.
4. Esteem – By esteem, Maslow referred to reputational needs of each individual. These needs included internal esteem factors like self-respect, autonomy, achievements and external esteem factors such as recognition and attention as well as personal sense of competence (Richer et al., 2002).
5. Self actualization – Once all the above needs were satisfied, the need for growth and success and to make the most of one’s abilities was needed to motivate individuals. Maslow referred to these needs as the need for self-fulfillment by achieving one’s potential to accomplish what one is capable of.

Maslow’s motivation theory has been widely accepted within industry circles. His theory was followed by Frederick Herzberg’s(1959, cited in Terpstra, 2005) two-factor theory. Herzberg and colleagues (Herzberg, Mausner, & Snyderman, 1959) focused primarily on sources of work satisfaction and, within that domain, mainly on ways in which the job could be designed to make the work itself enriching and challenging. Herzberg believed that people needed to be given a good job for them to do a good job. The basis of the theory was the difference between satisfaction and dissatisfaction. Herzberg believed that the presence of “Hygiene Factors” (which included factors such as, security, status, relationship with subordinates) did not lead to motivation; however its absence lead to de-motivation. There are contrasting views on Herzberg’s theory. Proponents argue that in the current competitive environment, the theory can be made to good use and has the potential of delivering favourable results.
Other motivation theories were proposed by Vroom (1964) and Porter-Lawler. The argument of Vroom’s expectancy theory was that motivation was based on values and beliefs of individuals. Both Vroom and Porter-Lawler examined motives through the perception of what a person’s belief and are based on the belief that employee effort leads to performance and performance leads to rewards (Vroom, 1964). The theory paid much emphasis on ‘reward’ and its association with motivation. Porter-Lawler believed that individuals can be motivated if they believed there was a positive correlation between the efforts they put in and their performance and when that favourable performance led to a reward (Ryan & Deci, 2000). Expectancy theory has been applauded within HR circles but critics believe that it lays too much emphasis on extrinsic awards. Questions have also been raised about the validity of the motivation equation as a product of expectancy, instrumentality and valence. Vroom and Porter-Lawler theory will be continually referred to during the research. Other researchers like Elton Mayo (through “Hawthorne Experiments”) believed motivation to be a complex subject.
Theorists like Skinner stressed on the importance of external environment and its role in motivating employees. He emphasized re-designing the external environment by making positive changes to encourage motivation and stated that suitable work environment should be made suitable to the individuals to keep them motivated (Bedeian, 2003). While Vroom and Porter-Lawler theory focused more on behavior choices, Skinner’s reinforcement theory focused on the consequences of those choices (Terpstra, 2005). There are other motivational theories proposed by Adams (Theory of Equity) and Douglas McGregor (Theory X and Theory Y).
Rewards can go a long way in motivating employees, thereby increasing productivity. Arguments against reward and rating system suggest that they are not a fair system as they do not weigh qualitative factors. They only take a one dimensional view of the employee and do not take into consideration factors such as work conditions, responsibility, team-work etc. Also, rewards in the form of financial incentives, at times, can serve as a bribe and do not help to connect the employee to the organization. Rather than encouraging an emotional relationship, it encourages a transactional relationship based on financial incentives (Troetsche, 2001). This might motivate employees for a short term but can be more de-motivating when the reward offered is less then what is expected. Advocators of reward system argue that when ratings and reward system are based on a good mix of indicators, they do help in motivating employees and rewards are a fair way of recognizing employees for their efforts (Ryan & Deci, 2000). Rating and reward systems do improve employee motivation if they serve to value the employees and are suited to employee conditions. When the rating system is more objective, rates employee fairly, is a good mix of qualitative and quantitative factors and when the rewards relate directly to employee achievements and performance, they will help to motivate employees.

Purpose

While every theorist has his/her version of motivation, there is considerable overlap among these theories. E.g. Every theory, directly or indirectly, concentrates on the basic human needs first. Maslow’s needs hierarchy demonstrates the importance of these needs in more detail. Herzberg’s two factor theory brings out the distinction between motivation and de-motivation and depicts the difference between the two. Vroom and Porter-Lawler’s theory is more of a quantitative nature and gives theorists a way to quantify the different motivational variables. The purpose of this research is to assess the effectiveness of motivation theories within the organizational context. The study seeks to determine the effect of benefits package on employee motivation. The objective is also to examine every theory in detail and assess its relevance in different organizational settings and in differing industry types and analyze the effect of reward schemes and benefit package within these settings. The study also focuses on the best use of these theories in improving employee productivity and analyzes the relationship between motivation and productivity.

Methodology

The philosophy adopted for the purpose of this research is ‘interpretivisim’ as the study tries to assess the effectiveness of motivation theories and determines its practical use within organizations. This would entail reliance on drawing inferences from the data collected. Therefore, the approach adopted for most of this study is inductive and the data collected is mostly qualitative in nature.
The research looks to interview HR managers from different organizations (Lloyds TSB, Kodak, Provident Financial, Ventura) to examine the practice of motivation theories. Primary research for the purpose of this research is collected by conducting face-to-face in depth semi-structured interviews. Saunders et al., (2007) define a face-to-face interview as a two way conversation between interviewer and the respondent where interviewer begins the proceedings of the interview to get the information needed for the research from the respondent. Considering all the choices, face-to-face interviews was selected ahead of focus groups and remote (telephonic, video-conference) interviews.
Other data collection techniques such as surveys, questionnaires, online questionnaires were not considered because the objective of this study required was to probe the respondent to get closer to the findings. In-depth face-to-face interviews gave more opportunities to probe the respondent than any other qualitative data collection methodology. Focus groups would have been ideal had the research been conducted in one organization. Because, this research spans across four different organizations, face to face interviews was the best option. Also, the researcher knew people through his network; it was not much difficult to convince people to spare some time for the interview.
It was decided to give a semi-structure to the interview because in an unstructured format, the interviewee dictates the course of the interview and the follow up questions are largely based on the interviewee’s responses. The course of the interview is based on the respondent response. For the purpose of this research, the researcher believed it was best to have some sort of structure to the interview to guide the course of the interview. But, at the same time, the researcher wanted the interviewee to give as much information as possible, so sufficient probing was vital to the structure. For all these reasons, it was decided to have a pre-set list of questions before the start of the interview. Saunders et al., (2007) point out that ‘the purpose of semi-structured interviewing is not to put things in someone’s mind…but to access the perspective of the person being interviewed.’ Since time was of the essence with these interviews, questions were carefully chosen to make sure that the answer to those questions would bring the research closer to its objectives. Questions were devised only after sufficient information was collected from secondary research.
Secondary Research is the collection of already published data. For the purpose of this study, secondary research was conducted before the primary data collection phase. Data collected through the secondary research acted as a guide to the primary research process and the interview questions asked during face to face interviews tried to cover areas where secondary research fell short. Secondary data was collected from cases, journals, books, magazines, online journals, newspapers. Secondary data also helps in providing multi-method triangulation to other research findings (Houston, 2004). All things being equal, secondary data should be used if it helps researchers to solve the research problem (Saunders et al., 2006).

Results and Discussion

It would be interesting to relate the secondary data collected to the practical world. The results from the secondary research suggested that no one motivation theory can be categorically said to be more effective than the other. Even though, Maslow’s theory is the most widely adapted, the applicability of motivation theories depends on organizational settings. Different work environment require different ways to motivate people. E.g. In environments where employees are involved in a monotonous role like assembly line workers or contact centre employees, Herzberg’s two-factor theory might be more effective than Vroom’s expectancy theory. Vroom stressed the importance of reward in encouraging motivation but reward would seize to be a motivator for employees where the job role remains static. Employees doing a monotonous role would get better motivation from job-redesign and training. Herzberg’s theory of ‘if you want employees to do a good job, give them a good job to do’ is more applicable in such circumstances. Similarly, Skinner’s motivation theory might be more appropriate in the current economic climate as motivation might be more related to the external environment. With the economic and financial crises and recession looming large on most economies, motivation is more dependant on external circumstances rather than internal. Mcgregor’s theory was found to be more effective under project management settings. E.g. A project manager using a Theory X motivational approach will have to create an authoritative and controlling work environment. The role assumed by project team members within a Theory X environment is to evade added responsibility and do as minimal amount of work as possible to achieve the project goals without punishment (Fishbach et al., 2005). On the other hand, Theory Y motivation naturally creates a participative environment with strong manager-employee relations. Within the project manager role of a Theory Y environment, the project manager will seek input and assistance from the project team to obtain the best possible alternative for project implementation. (Kerzner, 2003, pp. 194-195).
Motivation remains a challenge for organizations today and they need to evolve into more sophisticated, customer responsive business units. The rapid pace of the changing competitive and organizational landscape has meant that the solutions to motivation problems have become even more complex. To keep employees motivated and for motivation to have a direct effect on performance, organizations have to understand the process, theories, and fundamental components of motivation. The need for belongingness was found to improve motivation and is better satisfied in a company with a strong organizational culture, where people accept and support each other and form teams to work harmoniously (Judge et al., 2001).

Implications for Centers and Extension

The study will have implications for both practitioners and theorists. The research tries to determine the motivation theory which works best under specific circumstances. It also assesses the relevance of each theory within organizational setting. The findings and analysis from this research can be used by HR managers, team leaders and other people managers to determine the best use of motivation theory in their organizations or departments.