Motivation (08)

Question 1

SUMMARY

Answer 1

In summary, the following are covered in this topic:
1. Motivation is the desire of workers to see a job done quickly and well.
2. A motivated workforce will lead to low absenteeism, low labour turnover, high
productivity level and other positive impacts on an organisation.
3. An effective reward system is motivational, and will spur employees to work harder
and well. Rewards can be either intrinsic or extrinsic.
4. Theories of motivation can be classified into content theories and process theories of
motivation

5. Content theories of motivation include Maslow’s hierarchy of needs, Herzberg’s two-
   factor theory and McClelland’s motivational needs theory.
6. Process theories of motivation include Vroom’s expectancy theory and Adam’s equity
   theory
7. Incentives to motivate can be financial or non-financial.
8. Financial incentives include salary, time-based wage rate, piece rate, performance-
   related pay, profit-sharing and share ownership.
9. Non-financial incentives include training and development, effective induction,
   opportunities for promotion, job redesign, job enlargement, empowerment, job
   enrichment and team working.

Question 2

What is Motivation?

Answer 2

Motivation is the desire of workers to see a job get done quickly and well

Question 3

How will a motivated workforce affect a business positively?

Answer 3

Through;
1) low absenteeism
2) low labour turnover
3) high productivity level
4) good quality work leading to lower wastage costs
5) improved customer service and satisfaction
6) greater effort to achieve business objectives

Question 4

What is a reward?

Answer 4

A reward is an outcome of positive value to the individual.

Question 5

What are the two types of rewards?

Answer 5

1) Extrinsic rewards
2) Intrinsic rewards

Question 6

What is an Extrinsic reward?

Answer 6

An extrinsic reward is the payoff that a person receives from others for performing a particular task.

It is an external reward, where the payoff comes from pleasing others.

Examples of extrinsic rewards include pay bonuses, time-off, promotions, special
assignments, awards and verbal praise.

Question 7

What is an Intrinsic reward?

Answer 7

An intrinsic reward is the satisfaction, such as a feeling of accomplishment, which a person receives from performing a task itself.

It is an internal reward, where the payoff comes from pleasing oneself.

Examples of intrinsic rewards include feelings of competency, self-
development, and positive experiences in the work environment.

Question 8

What are the two types of motivation theories?

Answer 8

1) Content theories
2) Process theories

Question 9

What are Content theories?

Answer 9

Content theories, also known as needs theories, assume that individuals are
motivated by the desire to fulfil their inner needs, and thus focus on how managers can
create conditions that allow workers to satisfy these needs.

Question 10

What are Process theories?

Answer 10

Process theories seek to explain how and why people choose certain behaviours to meet
their personal goals and focus on the thought processes that influence behaviour.

Question 11

What are the Content theories?

Answer 11

1) Maslow’s hierarchy of needs
2) Herzberg’s two-factor theory
3) McClelland’s motivational needs theory

Question 12

What is Maslow’s hierarchy of needs?

Answer 12

(From highest to lowest)
1. Self-actualisation
2. Esteem needs
3. Social needs
4. Safety needs
5. Physical needs

Question 13

How can Maslow’s hierarchy of needs be interpreted?

Answer 13

Maslow’s hierarchy of needs can be interpretated as follows:
 A person’s needs start from the lowest level
 People will strive to achieve the next level once one level of need is satisfied
 Although everyone is capable of reaching his or her potential, not everyone can attain
self-actualisation
 A need will no longer motivate people once it has been satisfied. For example, if one
has enough money to spend, the offer of a pay raise will not motivate the person
 It is also possible to reverse the order, whereby if satisfaction of one level of need is
withdrawn, the person’s need will move down to the next level. For example, if there
is a loss of job security, a safety need, the level of need satisfied becomes physical
needs

Question 14

What are the limitations of Maslow’s hierarchy of needs?

Answer 14

Maslow’s hierarchy of needs has received the following criticisms:
 The assumption made by the hierarchy that everyone has the same needs may not be
accurate.
 In reality, it is difficult to identify the degree to which each need has been met and
which level of need a worker has.
 Although money is necessary to satisfy physiological needs, it is also important in
satisfying the other levels of needs, such as status and esteem.
 Self-actualisation can never be permanently achieved. Jobs must continually offer
challenges and opportunities for fulfilment, otherwise there will be deterioration in
performance.

Question 15

What is Herzberg’s Two-factor theory?

Answer 15

Herzberg’s two-factor theory centres on motivators and hygiene factors.

Question 16

What are Motivators?

Answer 16

Motivators or motivating factors, are aspects of a worker’s job that can lead to positive job satisfaction,
such as achievement, recognition, meaningful and interesting work, and advancement at work.

Question 17

What are Hygiene factors?

Answer 17

Hygiene factors are aspects of a worker’s job that have the potential to cause dissatisfaction, such as pay, working conditions, status and over-supervision by managers.

Question 18

How can Herzberg’s Two-factor theory influence the business’ decision making?

Answer 18

Herzberg’s two-factor theory could influence the decision-making of businesses in the
following ways:

 Improving pay and working conditions will help to remove dissatisfaction at work, but
they would not increase motivation. Herzberg argues that paying someone to do a job
does not mean he or she will do it well. In order for people to be motivated to do a
job well, motivators must be put in place.

 Herzberg suggests that one way to motivate employees is to adopt the principles of
‘job enrichment’, which aims to use the full capabilities of workers by giving them the
opportunity to do more challenging and fulfilling work.

 While a business could offer higher pay, improved working conditions and less micro
management, workers will still become complacent over time. If the work is not
interesting, rewarding or challenging, workers will not be motivated regardless of the
pay level.

Question 19

What is McClelland’s Motivational Needs Theory?

Answer 19

McClelland proposed the motivational needs theory, which states that three needs -
achievement, affiliation and power - are major motives determining employees’
behaviour in the workplace.

Question 20

What are the three needs?

Answer 20

1) Achievement motivation/ Need for achievement (n-ach). People who have high need
for achievement seek accomplishment at the workplace. They take on the
opportunity to reach realistic and challenging goals and job advancement. There is a
constant need for feedback regarding progress and achievement and a need for a
sense of accomplishment. Basically, this is the desire to excel, to do something better
or more efficiently, to solve problems, to achieve excellence in challenging tasks.

2) Affiliation motivation/ Need for affiliation (n-affil). People with high need for
affiliation prefer to maintain harmonious relationships with others and be accepted
by them. They are motivated towards interaction with other people. They are likely
to be good team members as they tend to conform to the norms of their work group.
Basically, this is the desire to have warm and friendly relations with others.

3) Power motivation/ Need for power (n-pow). People with need for power desires to
control others in the group. They are ‘authority motivated’. The need to be influential,
effective and make an impact is a powerful motivating force. When authority is gained
over others, it brings personal status and prestige. Basically, this is the desire to be
responsible for other people, to influence their behaviour or to control them.

Question 21

How can McClelland’s theory be applied?

Answer 21

McClelland associates the three needs with different sets of work preference, as follows:

 Need for achievement. Employees have a high need for achievement if they are happy
with accomplishment of a task being its own reward, prefer to work independently,
and are willing to take reasonable risks. Such employees would be motivated by
performance pay, challenging but achievable goals, and individual responsibility for
results. Employees high in need for achievement tend to do well in technical fields
requiring creativity and individual skills.

 Need for power. Employees, usually managers, have a high need for power when they
enjoy being in control of people or events, and are recognised for such responsibility.
Such employees would be motivated for work that allows them to control or have an
effect on people, and are publicly recognised for their accomplishments.

 Need for affiliation. Employees with a high need for affiliation tend to seek social
approval and satisfying personal relationships. As such they would not make efficient
managers as they might be required to make unpopular decisions which caused
others to dislike them. Such employees would be motivated with work, such as a sales
job, that provides for personal relationships and social approval.

Question 22

What is Vroom’s expectancy theory?

Answer 22

Vroom’s expectancy theory suggests that individuals choose to behave in ways that they
believe will lead to outcomes they value. The theory states that individuals have different
set of goals and can be motivated if they believe that:
 there is a positive relationship between effort and performance
 favourable performance will lead to a desirable reward
 the reward will satisfy an important need
 the desire to satisfy the need is strong enough to make the work effort worthwhile

Question 23

What is Vroom’s expectancy theory based on?

Answer 23

The theory is based on three elements:

 Expectancy. Expectancy is the degree to which people believe that putting effort into
work will lead to a given level of performance. It is the belief that a particular level of
effort will lead to a particular level of performance.

 Instrumentality. Instrumentality is the confidence of employees that they will actually
get what they desire. It is the expectation that successful performance of the task will
lead to the outcome desired.

 Valence. Valence is the depth of the want of an employee for an extrinsic reward,
such as money, or an intrinsic reward, such as satisfaction. It is the value and
importance a worker assigns to the possible outcome or reward.

Question 24

How can Vroom’s expectancy theory be applied?

Answer 24

Vroom suggests that when attempting to motivate employees, managers should consider
the following:

 Rewards valued by subordinates.
- Managers need to know their subordinates and determine the types of rewards or outcomes they value, such as pay raises or recognition.

 Job objectives and desired performance level.
- Managers need to clearly define the performance objectives and determine the performance level or behaviour expected, so that subordinates know what is required to attain the rewards.

 Linking rewards to performance.
- Managers should reward high performance. Thus, employees must be aware that X level of performance with Y period of time will result in Z kinds of rewards. In a team context, it is best to use a combination of individual
and team-based rewards.

 Subordinates’ belief in managers.
- Subordinates must believe that managers are credible, and have the power, ability and will to give them the rewards promised for the performance requested.

Question 25

What are the limitations of the expectancy theory?

Answer 25

Critics of Vroom’s theory believe that the theory is idealistic as some people may not perceive a high degree of correlation between performance and rewards. Also, the application of the theory is limited as reward could be correlated with other factors such as position and responsibility, not necessarily with performance.

Question 26

What is Adam's equity theory of motivation?

Answer 26

Adams’ equity theory focuses on employees’ perceptions as to how fairly they think they are being treated compared to others. It is based on the idea that employees are motivated to see fairness in the rewards they expect for task performance. Employees are motivated to resolve feelings of injustice.

Question 27

What are the key elements in equity theory?

Answer 27

The key elements in equity theory are inputs, outputs and comparisons.  Inputs. - Inputs are the quality and quantity of an employee’s contributions to his/her work. They include time, effort, skills, intelligence, creativity etc.  Outputs. - Outputs, also known as rewards, are the outcomes an employee receives from the business. Outputs include salary, fringe benefits, bonus, recognition, sense of achievement, status etc.  Comparison. - Equity theory suggests that employees compare the ratio of their own outcomes to inputs against the ratio of another person’s outcomes to inputs. When employees compare the ratio of their inputs and outputs with those of others - whether colleagues in the same business or other people in similar jobs - they make a judgement about fairness. They either perceive there is equity, and hence are satisfied with the ratio and maintain their behaviour; or they perceive there is inequity, and so they feel aggrieved and act to change the inequity.

Question 28

How will employees who feel they are being under-rewarded respond to the perceived inequality?

Answer 28

Adams suggests that employees who feel they are being under-rewarded will respond to the perceived inequality in one or more negative ways, as follows:  Reduce their inputs. - Employees will do less work, take long breaks, report sick on Mondays, leave early on Fridays, etc.  Change the outputs or rewards they receive. - Employees will pressure the boss for a raise, or they may take assets or property belonging to the business home for their own use.  Distort the inequality. - Employees will exaggerate how hard they work so that they can complain that they are not paid fairly.  Change the object of comparison. - Employees may compare themselves with another person instead of the original one.  Leave the situation. - Employees may quit the business, or transfer to another department.

Question 29

How should managers motivate employees?

Answer 29

 Managers should provide positive recognition about employee behaviour and performance, and explain the reasons behind their decisions. This is because no matter how fair managers think the company’s policies, procedures, and reward system are, each employee’s perception of these matters most.  Managers should allow employees to participate in the decision-making process, even for the important ones. By doing so, employees would feel a sense of belonging and become more motivated as a result. In addition, there will be less resistance if the decisions affect their work.  Managers should have an appeal process. When employees are able to appeal decisions affecting their welfare, it promotes the belief that management treats them fairly. Perceptions of fair treatment promote job satisfaction, commitment, and reduce absenteeism and turnover.

Question 30

What are Financial Incentives?

Answer 30

Financial incentives refer to monetary benefits offered to employees to encourage behaviour or actions which otherwise would not take place

Question 31

What are included as Financial Incentives?

Answer 31

1) Salary 2) Time-based wage rate 3) Piece rate 4) Performance-related pay 5) Profit sharing and share ownership

Question 32

What is Salary?

Answer 32

Salary refers to the annual income that is usually paid on a monthly basis.

Question 33

Why is fixing the salary amount for each job position important?

Answer 33

Fixing the salary amount for each job position is important because it helps to determine the status and importance of the position in the business.

Question 34

What are the advantages of Salary payment?

Answer 34

The advantages of the salary payment system are that it provides employees with a sense of security where income is concerned, as well as provides status as compared to time-rate or piece-rate payment systems. It also helps the business in the budgeting process, as the salaries would not change much within a year.

Question 35

What are the disadvantages of Salary payment?

Answer 35

The disadvantages of the salary payment system is that amount paid is not correlated to effort or productivity, hence employees might be complacent and not work as hard. Regular appraisal is required to assess if an employee should have his or her salary increased.

Question 36

What is Time-based wage rate?

Answer 36

Time-based wage rate refers to payment to workers for each period of time worked, such as an hour. The time-based wage rate offers some security to workers, but it is not directly linked to the level of output or effort.

Question 37

What is Piece rate?

Answer 37

Piece rate refers to a payment to a worker for each unit produced. The rate is fixed for the production of each unit, and the amount paid to workers depend on the quantity of output produced. Based on the difficulty of the job, and the average time to complete it, the piece rate amount could be adjusted accordingly.

Question 38

Why is the Piece rate level important?

Answer 38

The level of rate is very important, as if it is set too low, workers would be demotivated, but if it is set too high, it can reduce the incentives as workers can earn a lot by producing relatively fewer units.

Question 39

What are the advantages of using the Piece rate payment system?

Answer 39

The advantages of the piece rate payment system is that it encourages faster working and greater effort. Also, the labour cost of each unit of production is predetermined, and this helps the business in setting the price for the product.

Question 40

What are the disadvantages of using the Piece rate payment system?

Answer 40

1) The disadvantages of the piece rate payment system is that it requires output to be measurable and standardised; piece rate would not be appropriate if each product is different. 2) Also, workers might rush to complete units and this could lead to poorer quality and safety standards. 3) Workers might settle for a certain pay level and would not be motivated to produce beyond a certain output. 4) Lastly, if the machinery breaks down, workers would not be paid and hence have little security over pay level.

Question 41

What is Performance-related pay?

Answer 41

Performance-related pay is a bonus scheme to reward employees for above-average work performance. The main purpose is to provide further financial incentives and to encourage employees to meet agreed targets. Bonuses are usually paid on an individual basis, but they can also be calculated and awarded on a team or department basis.

Question 42

What are the advantages of using Performance-related pay?

Answer 42

The advantages of the performance-related pay system is that employees will be motivated to improve performances if they are seeking greater financial rewards. Through target setting, employees would also be given a sense of purpose and direction. As managers would need to conduct appraisal to determine the performance bonus, it also provides an opportunity for feedback to be given to employees.

Question 43

What are the disadvantages of using Performance-related pay?

Answer 43

The disadvantages of the performance-related pay system is that if employees are not driven by the additional financial rewards, it will not motivate. Also, if employees compete against each other to earn a higher performance bonus, team spirit might be damaged. As managers are basically the ones determining the performance bonus, managers might be accuse of favouritism and this can harm manager-subordinate relationships.

Question 44

What is Profit sharing ?

Answer 44

Profit sharing refers to a bonus paid to employees based on the profits of the business, and this is usually paid as a proportion of the basic salary. The core idea behind profit sharing is that employees will become more committed to the success of the business and will strive for higher performance and cost savings. Some profit sharing schemes do not offer cash but shares in the business to each worker when a profit is made. This is designed to establish the workers as part-owners of the business and reduce any conflict that might exist between shareholders/ management and workers. In practice, many of the shares in such schemes are quickly sold by the workers, thus reducing any long-term impact on motivation.

Question 45

What are the advantages of Profit sharing?

Answer 45

The advantages of profit sharing and share ownership are that any potential conflict between owners and workers is reduced as everyone now has a common interest in higher profits. The system is designed to result in higher worker effort levels and a greater willingness to accept cost reduction measures and changes that benefit the business, as long as these increases profits. The business is also likely to recruit better employees who are attracted by the opportunity to share profits or own shares of the business.

Question 46

What are the disadvantages of Profit sharing?

Answer 46

The disadvantages of profit sharing and share ownership are that the reward offered is not correlated with individual, so workers might not put in greater effort if they see others benefitting from their hard work. In addition, share of profits are usually paid at the end of the year, and this is unlikely to promote motivation throughout the year. Shareholders might also be unhappy as profit sharing would reduce the amount of dividends paid to them, as well as retained earnings that can be reinvested into the business. In addition, the share ownership scheme can increase the total number of shares issued and dilute the value of existing shares.

Question 47

What are Non-financial incentives?

Answer 47

It is recognised that money alone will not to be able to create motivation in employees. Hence, non-monetary benefits must also be offered to employees to encourage behaviour or actions to take place. Non-financial incentives include the following: 1) Training and development 2) Opportunities for promotion 3) Job redesign 4) Job enlargement 5) Empowerment and delegation 6) Job enrichment 7) Team working

Question 48

What is training?

Answer 48

Training refers to improving and developing the skills of employees

Question 49

Why is training important?

Answer 49

It is an important motivator, as it increases the status of workers and gives them a better chance of promotion to more challenging and better paid positions within the business. It is often an important incentive for employees to stay with a business as they feel that they are being fully developed and appreciated by the company.

Question 50

What is the disadvantage of having your employees trained?

Answer 50

Training can also lead to employees leaving a business as they are now better qualified to gain employment within other companies.

Question 51

What is Induction?

Answer 51

Induction refers to the integration of new employees into the business, and to make them understand the systems and procedures in the business.

Question 52

Why is Effective Induction important?

Answer 52

Effective induction helps new employees settle down quickly in the new work environment, and gives them a sense of belonging. Effective induction gives a warm welcome to the employee and focuses on clarifying all his or her doubts about the business and job scope. It ensures that the new employee feels comfortable in the business. It also makes him feel welcomed, respected, and valued. This motivates the new employee greatly.

Question 53

How are opportunities for promotion important?

Answer 53

Employees who see these as attainable goals via promotions will work towards demonstrating their supervisory and leadership skills. They will also take on positive traits that reflect positions of authority, such as accountability and a willingness to cooperate with colleagues.

Question 54

What is Job redesign?

Answer 54

Job redesign involves the restructuring of a job, usually with employees’ involvement and agreement, to make the job more interesting, satisfying and challenging.

Question 55

Why is Job redesign important?

Answer 55

These job changes can lead to improved recognition by management for the work undertaken by workers and can increase workers’ chances of gaining promotion as a result of the wider skills gained.

Question 56

What are examples of Job redesign?

Answer 56

An example of job redesign include encouraging bank tellers to sell financial products to customers, beyond simply handling deposit and withdrawal transactions. Another example is to allow hairdressers to add beauty therapies as part of their total job skills.

Question 57

What is Job enlargement?

Answer 57

Job enlargement refers to attempts to increase the scope of the job by broadening or deepening the tasks undertaken. It is increasing the loading of tasks on existing workers, at times due to shortage of staff. It is unlikely to lead to long-term job satisfaction.

Question 58

What is empowerment and delegation?

Answer 58

Empowerment and delegation involves the passing down of authority to perform tasks to workers, and also to allow them some degree of control over how the tasks should be undertaken.

Question 59

What is Job enrichment?

Answer 59

Job enrichment involves a reduction of direct supervision as workers take more responsibility for their own work and are allowed some degree of decision-making authority

Question 60

What are the three features of Job enrichment?

Answer 60

 Complete units of work so that the contribution of the worker can be identified and more challenging work offered.  Direct feedback on performance is provided to each worker to allow them to have an awareness of their own progress.  Challenging tasks offered as part of a range of activities, some of which are beyond the worker’s recent experience; these tasks will require training and the learning of new skills. Workers gain status and recognition by acquiring further skills and qualifications.

Question 61

What is Team working?

Answer 61

Team working involves placing each member of staff into small team of employees

Question 62

What is the advantage of Team working?

Answer 62

Successful use of team working will result in lower labour turnover, as well as more and better ideas from the workers on improving the product and manufacturing process. It might also result in the production of higher quality products.

Question 63

What is the disadvantage of Team working?

Answer 63

However, critics of team working suggests that this will result in lower productivity and time-consuming team meetings.