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Motivating Employees: Why It Matters

What motivates you to do what you do? How do you motivate others to help you or to accomplish things

on their own? You have already learned about the role both managers and employees play in helping

organizations reach their goals. As a manager, you are expected to lead and manage people. As an

employee, you are given job-specific duties and responsibilities to perform. Neither leading nor following

will happen unless people are motivated.

This video (https://youtu.be/dysp4PtHgtQ) on the motivational strategies used by Zappos is a good

place to begin our discussion of motivation in business. What motivates the employees at Zappos? Is it

high salaries? Long vacations? The chance to shave their heads at the company picnic once a year? As you

watch the video, pay attention to what really motivates Zappos workers.

Since the 1920s, researchers have studied human behavior, developing a variety of theories to explain the

driving force behind motivation. These theories range from the need to provide a safe and secure

environment to the desire not to experience negative consequences from action or inaction.

Understanding the basis for motivation and how motivational approaches work within an organization can

help you and your business be successful.

As you read on, ask yourself the following questions:

What motivates me?

How have others tried to motivate me?

Which motivational approaches have been the most and least successful?

When have I been successful in motivating others?

How can I use this information to be successful in my personal and professional life?

The Hawthorne Studies

Many of today’s ideas about the connection between human motivation and employee performance can be

traced back to discoveries from the Hawthorne studies.

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Hawthorne Works, c. 1920

During the 1920s, Elton Mayo conducted a series of studies on workers at the Hawthorne plant of the

Western Electric Company in Illinois. These studies changed the direction of motivational and managerial

theory from earlier studies, in particular Frederick Taylor’s “man as machine” view that focused on ways of

improving individual performance.

In contrast, Hawthorne set the individual in a social context. He argued that an employee’s work

surroundings and coworkers have as much influence over performance as skill and ability. The Hawthorne

studies are credited with focusing managerial strategy on the sociopsychological aspects of human

behavior in organizations.

This video (https://youtu.be/D3pDWt7GntI) from the AT&T archives contains interviews with

individuals who participated in these studies. It provides insight into the way the studies were conducted

and how they changed employers’ views on worker motivation.

The studies originally examined the effects of physical conditions on productivity and whether workers

were more responsive and efficient under certain environmental conditions, such as better lighting. The

results were surprising: Mayo found that workers were more responsive to social factors—such as their

manager and coworkers—than the other factors being investigated. When the lights were dimmed again

and the workplace was returned to pre-experimental conditions, productivity rose to its highest level and

absenteeism plummeted.

Mayo had discovered that workers responded when they received more attention from their managers:

Employees were more productive when they felt that their managers cared about and were interested in

their work. The studies also found that although financial incentives are important drivers of worker

productivity, social factors are equally important.

The Hawthorne studies also included a number of other experiments, including one in which two women

were chosen as test subjects and were asked to choose four other workers to join the test group. Each

person’s performance was measured before they were grouped in a separate room from other employees,

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and their performance continued to be measured for five years as they worked assembling telephone

relays. In the experiment room, they were assigned to a supervisor, who sometimes used the test subjects’

suggestions to make changes.

The researchers then measured how different variables affected group and individual productivity.

Changing a variable usually increased productivity, even if the variable was just a change back to the

original condition. The researchers concluded that the employees worked harder because they thought

they were being monitored individually. They hypothesized that choosing one’s coworkers, working as a

group, being treated as special (as evidenced by working in a separate room), and having a sympathetic

supervisor were the real reasons for the productivity increase.

The Hawthorne studies showed that people’s work performance is dependent on social issues and job

satisfaction. The studies concluded that tangible motivators, such as monetary incentives and good

working conditions, are generally less important in improving employee productivity than intangible

motivators, such as meeting individuals’ desire to belong to a group and be included in decision making and

work.

Licenses and Attributions

Chapter 10: Motivating Employees (https://courses.lumenlearning.com/wm-

introductiontobusiness/chapter/why-it-matters-motivating-employees/) by Linda Williams and Lumen

Learning from Introduction to Business is available under a Creative Commons Attribution 4.0 International

(http://creativecommons.org/licenses/by/4.0/) license. UMGC has modified this work and it is available

under the original license.

© 2022 University of Maryland Global Campus

All links to external sites were verified at the time of publication. UMGC is not responsible for the validity or integrity of information located at

external sites.

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Need-Based Theories

We will look at four main theories about how human needs are satisfied: Maslow’s hierarchy of needs,

Alderfer’s ERG theory, Herzberg’s two-factor theory, and McClelland’s acquired-needs theory.

Maslow’s Hierarchy of Needs

Human motivation can be defined as the fulfillment of various needs. These needs can encompass a range

of human desires, from basic, tangible needs of survival to complex emotional needs surrounding an

individual’s psychological well-being.

Abraham Maslow, a social psychologist, was interested in a broad spectrum of human psychological needs,

rather than individual psychological problems. He is best known for his hierarchy-of-needs theory.

Depicted in the pyramid below, the theory organizes the different levels of human psychological and

physical needs in order of importance.

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Maslow’s Hierarchy of Needs

Managers can apply Maslow’s hierarchy to better understand employees’ needs and motivation, and

address them in ways that lead to high productivity and job satisfaction.

Physiological and Safety Needs

At the bottom of the pyramid are the physiological, or basic human survival needs: food, shelter, water,

sleep, etc. Once physiological needs are satisfied, individual safety takes precedence. Safety and security

needs include personal security, financial security, and health and well-being.

After they have basic nutrition, shelter, and safety, people seek to fulfill higher-level needs.

Connection: The Third Level of Need

The third level of needs—love and belonging—are the desire to share and connect with others. Neglect,

shunning, or ostracism can impact a person’s ability to form and maintain emotionally significant

relationships. Humans need to feel a sense of belonging and acceptance, whether from a large social group

or a small network of family and friends. Without these attachments, they may be vulnerable to loneliness,

social anxiety, and depression.

Higher-Level Needs

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The fourth level is esteem—the normal human desire to be valued and validated by others—as well as self-

esteem. People with low self-esteem may find that external validation by others—through fame, glory,

accolades, etc.—only partially or temporarily fulfills their needs at this level.

Finally, at the top of the pyramid is self-actualization. At this stage, people feel that they have reached

their full potential. Self-actualization may occur after reaching an important goal or overcoming a particular

challenge, and it may be marked by a new sense of self-confidence or contentment. But it is rarely a

permanent state. Rather, self-actualization is an ongoing need for personal growth and discovery that

people have throughout their lives.

Hierarchy of Needs and Organizational Theory

Maslow’s hierarchy of needs is relevant to organizational theory because both are concerned with human

motivation. Understanding what people need—and how their needs differ—is an important part of effective

management. For example, some people work primarily for money (and fulfill their other needs elsewhere),

but others like to go to work because they enjoy their coworkers or feel respected by others and

appreciated for their good work.

In the workplace, Maslow’s hierarchy of needs suggests that if a lower need is not met, then the higher

ones will be ignored. For example, if employees lack job security, they will be far more concerned about

their financial well-being and paying their bills than about friendships and respect at work. However, if

employees receive adequate financial compensation (and have job security), meaningful group relationships

and praise for good work may be more important motivators.

Consequences of Unmet Needs

When their needs aren’t met, employees can become very frustrated. For example, if someone works hard

for a promotion and doesn’t get the recognition it represents, that employee may lose motivation and put

in less effort. Also, after a need is met, it will no longer serve as a motivator; the next level up in the needs

hierarchy will become more important. Therefore, keeping employees motivated can seem like a moving

target. People seldom fit neatly into pyramids or diagrams, though; their needs are complicated and often

change over time.

Assessing Needs Accurately

Here's an example: Maria is a long-time employee who is punctual, does high-quality work, and is well liked

by her coworkers. However, her supervisor begins to notice that she is coming in late and seems distracted.

He concludes that Maria is bored with her job and wants to leave. But when he raises these issues in her

semiannual performance appraisal, he learns that Maria’s husband lost his job six months ago and, unable

to keep up with mortgage payments, the couple has been living in a hotel. Maria has moved down the

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needs pyramid and, if the supervisor wants to be an effective manager, he must adapt the motivational

approaches he uses. In short, a manager’s best strategy is to recognize this complexity and try to remain

attuned to what employees say they need.

Alderfer’s ERG Theory

Clayton Paul Alderfer, an American psychologist, used Maslow’s hierarchy of needs in developing the his

ERG theory, which refers to core needs in three areas:

existence

relatedness

growth

These three areas align, respectively, with Maslow’s levels of physiological, social, and self-actualization

needs.

Alderfer proposed that when needs in one category are not met, people will redouble their efforts to fulfill

needs in a lower category. For example, if their self-esteem (an area of need in the growth category) is

suffering, people will invest more effort in the relatedness category of needs.

Herzberg’s Two-Factor Theory

American psychologist Frederick Herzberg is regarded as one of the great original thinkers in management

and motivational theory. He set out to determine the effect of attitude on motivation by simply asking

people to describe the times when they felt really good and really bad about their jobs. What he found was

that people who felt good gave very different responses from people who felt bad.

The results from this inquiry form the basis of Herzberg’s Motivation-Hygiene Theory, sometimes called

Herzberg’s two-factor theory (1968), which hypothesized that two sets of factors govern job satisfaction

and job dissatisfaction: hygiene factors, or extrinsic motivators, and motivation factors, or intrinsic

motivators.

Hygiene factors, or extrinsic motivators, tend to represent tangible, basic needs like those noted in both

the existence category of ERG theory and in the lower levels of Maslow’s hierarchy of needs. Extrinsic

motivators include status, job security, salary, and fringe benefits. It’s important for managers to realize

that not providing the appropriate and expected extrinsic motivators will sow dissatisfaction and decrease

motivation among employees.

Motivation factors, or intrinsic motivators, tend to be less tangible. They are tied more to emotional needs

like those identified in the relatedness and growth categories in the ERG theory and at the higher levels of

Maslow’s hierarchy of needs. Intrinsic motivators include challenging work, recognition, relationships, and

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growth potential. Managers need to recognize that while these needs may fall outside the traditional scope

of what a workplace ought to provide, they can be critical to strong individual and team performance.

The factor that differentiates two-factor theory from the others is the role of employee expectations.

According to Herzberg, intrinsic motivators and extrinsic motivators have an inverse relationship. Intrinsic

motivators tend to increase motivation when they are present, while extrinsic motivators tend to reduce

motivation when they are absent. This is due to employees’ expectations. Extrinsic motivators (e.g., salary,

benefits) are expected, so they won’t increase motivation when they are in place, but they will cause

dissatisfaction when they are missing. Intrinsic motivators (e.g., challenging work, growth potential), on the

other hand, can be a source of additional motivation when they are available.

If managers want to increase employees’ job satisfaction, they should be concerned with the nature of the

work itself—opportunities for employees to gain status, assume responsibility, and achieve self-realization.

If, on the other hand, management wishes to reduce dissatisfaction, then the focus should be on the job

environment—policies, procedures, supervision, and working conditions. To ensure a satisfied and

productive workforce, managers must pay attention to both sets of job factors.

McClelland’s Acquired-Needs Theory

Psychologist David McClelland’s acquired-needs theory splits the needs of employees into three

categories:

achievement

affiliation

power

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Employees who are strongly achievement-motivated are driven by the desire for mastery. They prefer

working on tasks of moderate difficulty in which outcomes are the result of their effort rather than luck.

They value receiving feedback on their work.

Employees who are strongly affiliation-motivated are driven by the desire to create and maintain social

relationships. They enjoy belonging to a group and want to feel loved and accepted. They may not make

effective managers because they may worry too much about how others will feel about them.

Employees who are strongly power-motivated are driven by the desire to influence, teach, or encourage

others. They enjoy work and place a high value on discipline. However, they may take a zero-sum approach

to group work—for one person to succeed, another must fail. If channeled appropriately, their motivation

can positively support group goals and help others in the group feel competent.

The acquired-needs theory doesn’t claim that people can be neatly categorized as one of the three types.

Rather, it asserts that all people are motivated by all of these needs to varying degrees. Also, needs do not

necessarily correlate with competencies; it is possible for an employee to be strongly affiliation-motivated,

for example, but still be successful in a situation that doesn’t meet that employee's affiliation needs.

McClelland proposes that people in top management generally have a high need for power and a low need

for affiliation. He also believes that although individuals with a need for achievement can make good

managers, they are not generally suited to being in top management positions.

Process-Based Theories

Next, we will discuss three process-based theories of motivation: equity theory, expectancy theory, and

reinforcement theory.

Equity Theory

In contrast to the need-based theories we have covered so far, process-based theories view motivation as

a rational process. Individuals analyze their environment, develop reactions and feelings, and respond in

specific, predictable ways.

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Equity theory attempts to explain relational satisfaction in terms of perceived fairness: That is, people

evaluate how fair or unfair distribution of resources is within their interpersonal relationships. Regarded as

one of many theories of justice, equity theory was first developed in 1963 by John Stacey Adams. Adams, a

workplace and behavioral psychologist, asserted that employees seek to maintain equity between their

inputs and rewards from a job, and the perceived inputs and outcomes of others.

Equity theory proposes that people value fair treatment, which motivates them to maintain a similar

standard of fairness with their coworkers and the organization. Accordingly, equity structure in the

workplace is based on the ratio of inputs to outcomes.

Inputs are the employee’s contributions to the workplace. They include time spent working and level of

effort but can also include less tangible contributions such as loyalty, commitment, and enthusiasm.

Outputs are what the employee receives from the employer. They can also be tangible or intangible.

Tangible outcomes include salary and job security. Intangible outcomes might be recognition, praise, or a

sense of achievement.

A Workplace Example

For example, let’s look at Ross and Ayla, who both perform similar jobs for a large magazine publishing

company. If Ross received a pay raise but saw that Ayla was given a larger raise for the same amount

of work, Ross would evaluate this change, perceive an inequality, and be distressed. However, if Ross

perceived that Ayla was being given more responsibility and, therefore, more work that matched the

salary increase, then he would see the change as fair and would not object to it.

An employee will perceive treatment as fair if the ratio of inputs to outcomes seems equivalent for all

of the employees who are being compared.

Primary Propositions

Equity theory includes the following primary propositions:

Individuals will try to maximize their outcomes.

Individuals can maximize collective rewards by evolving accepted systems for equitably apportioning

resources among members. As a result, groups will evolve such systems of equity and will attempt to

induce members to accept and adhere to these systems. In addition, groups will generally reward

members who treat others equitably and punish members who treat others inequitably.

When individuals find themselves in inequitable relationships, they will become distressed. The more

inequitable the relationship, the more distress they will feel. According to equity theory, the person

who gets “too much” and the person who gets “too little” both feel distressed. The person who gets

too much may feel guilt or shame. The person who gets too little may feel angry or humiliated.

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Individuals who discover they are in inequitable relationships will attempt to eliminate their distress by

restoring equity.

Compensation

When employees compares their input/outcome ratios to other workers’, they will look for others with

similar jobs or skill sets. For example, Ross would not compare his salary and responsibilities to those of the

magazine company’s CEO. However, he might look outside the organization for comparison. For example,

he might visit a job search website to check salaries for positions like his at other publishing houses.

Pay, whether hourly or salary, is a central concern for employees and is therefore the cause of equity or

inequity in most, but not all, cases. In any position, employees want to feel that their contributions and

work performance are being rewarded with fair pay. An employee who feels underpaid may experience

feelings of hostility toward the organization and perhaps coworkers. This hostility may cause the employee

to underperform and breed job dissatisfaction among others.

Subtle or intangible compensation also plays an important role in equity. Receiving recognition and being

thanked for strong job performance can help employees feel valued and satisfied with their jobs, resulting

in better outcomes for both the individual and the organization.

Equity theory has several implications for business managers:

Employees measure the total of their inputs and outcomes. This means a working

parent may accept lower monetary compensation in return for more flexible working

hours.

Different employees ascribe different personal values to inputs and outcomes. Thus,

two employees of equal experience and qualification performing the same work for the

same pay may have different perceptions of the fairness of the deal.

Employees are able to adjust for purchasing power and local market conditions. Thus, a

teacher from Vancouver, Washington, may accept lower compensation than a colleague

in Seattle if the cost of living is different, and a teacher in a different culture and

environment may accept a totally different pay structure.

Although it may be acceptable for more senior staff to receive higher compensation,

there are limits to the balance of the scales of equity, and employees can find excessive

executive pay demotivating.

Staff perceptions of inputs and outcomes of themselves and others may be incorrect, so

perceptions need to be managed effectively.

Key Points

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Expectancy Theory

Expectancy theory, initially put forward by Victor Vroom at the Yale School of Management, suggests that

behavior is motivated by anticipated results or consequences. Vroom proposed that a person decides to

behave in a certain way based on the expected result. For example, people will work harder if they think

the extra effort will be rewarded.

According to expectancy theory, this process begins in childhood and continues throughout life.

Expectancy theory has three components: expectancy, instrumentality, and valence.

Expectancy is the belief that effort will lead to the intended performance goals. It describes a person’s

belief that “I can do this.” Usually, the belief is based on an individual’s past experience, self-confidence,

and the perceived difficulty of the performance standard or goal. Factors associated with a person’s

expectancy perception are competence, goal difficulty, and control.

Instrumentality is the belief that meeting the performance expectation will result in a desired outcome.

Instrumentality reflects the person’s belief that, “If I accomplish this, I will get that.” The desired outcome

may be a pay increase, promotion, recognition, or sense of accomplishment. Having clear policies in place—

preferably spelled out in a contract—guarantees that the reward will be delivered if the agreed-upon

performance is met. Instrumentality is low when the outcome is vague or uncertain, or if the outcome is

the same for all possible levels of performance.

Valence is the unique value an individual places on a particular outcome. Valence captures the fact that “I

find this particular outcome desirable because I’m me.” Factors associated with a person’s valence are

needs, goals, preferences, values, sources of motivation, and the strength of their preference for a

particular outcome. An outcome that one employee finds motivating and desirable—such as a bonus or pay

raise—may not be motivating and desirable to another (who may, for example, prefer greater recognition or

more flexible working hours).

Expectancy theory, when properly followed, can help managers understand how individuals are motivated

to choose among various behavioral alternatives. To enhance the connection between performance and

outcomes, managers should use systems that tie rewards closely to performance. They can also use

training to help employees improve their abilities and their belief that added effort will lead to better

performance.

A Note of Caution

It’s important to understand that expectancy theory can run aground if managers interpret it too

simplistically. Vroom’s theory entails more than just the assumption that people will work harder if they

think their effort will be rewarded. The reward needs to be meaningful and take valence into account.

Valence has a significant cultural as well as personal dimension, as illustrated here:

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When Japanese motor company ASMO opened a plant in the United States, it brought in many Japanese

workers but hired American managers to oversee operations. The managers, seeking to motivate the

workers with a reward system, initiated a costly employee-of-the-month program that included free

parking and other perks. The program was a huge flop, and participation was disappointingly low. Why?

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