Motivating Teams and Individuals: Reward Systems

What is motivation? Willingness to exert high levels of effort toward organizational goals, conditioned by the effort’s ability to satisfy some individual need or desire (Robbins, p.168). Motivation is studied in terms of how it refers to other things, such as needs, drives, goals, incentives of disincentives. (McKenna, E., 1996).

Work motivation can be described as a willingness to apply one’s efforts towards the achievement of the organisation’s goals, while concurrently an individual need is satisfied.​

What is the main interest of managers in motivation?​ Managers and Leaders need to work on motivation in order to achieve objectives for the organisation and the team​. The  aim should be to change employees’ motivations from what they are, to what the manager wants them to be (Purcell et al, 2003)​

Therefore, it is related to performance. Performance is behaviour​ because you are doing something. Concepts of performance involve ‘levels’ of performance and ‘quality’ of performance​, which means that performance is linked to measurement​. Therefore, motivation is key to achieving good performance.

The key theories of motivation involve

  • content theories – the ‘what’ of motivation – This is based on Outcome and Reward
  • process or Cognitive theories – the ‘how’ of motivation – cognitive processes used to connect effort with outcome or reward)

The ‘internal forces that impel action and the external forces that can act as inducements to action’ ​ (Locke and Latham, 1979)​.  There are three main aspects of action:​

  • direction of choice
  • levels of effort or intensity
  • duration or persistence

​Latham and Locke (1979), cited in McKenna (2000), distinguish between extrinsic and intrinsic motivation. Extrinsic motivation is derived from expectation of receiving extrinsic or tangible reward (e.g. promotion or pension).​ Intrinsic motivation is derived from expectation of receiving intrinsic or ‘psychological’ reward (e.g. recognition, respect or an Award).

Content Theories

Content theories can be listed below:

  • Maslow’s hierarchy of needs​
  • Alderfer’s ERG hierarchy – ERG (existence-relatedness-growth)​
  • Herzberg’s two factor theory​
  • McClelland’s achievement motivation theory​
  • Hackman and Oldman’s job characteristics model.​

These theories mostly adopt a universal approach, and they assume all people possess a common set of needs. They assume that people have a bucket of motivations that await gratification, and this is used to explain why people choose to act in one way and not another.

Content Theories are described next:

Maslow’s Hierarchy of needs is probably the most well-known, and the theory probably stops there for a lot of people. However, it was later refined by other content authors, and then the emphasis turned to more cognitive theories.

heirarchyofneeds

Credit: Penn State Leadership https://sites.psu.edu/leadership/2014/11/29/prepare-for-success-path-goal-theory-and-maslows-needs-hierarchy/ 

 Alderfer’s ERG theory summarizes these needs into three related needs:​

  • existence needs​
  • relatedness needs​
  • growth needs.​

More than one need can be activated at any one time, and we can regress back to a lower need if a higher need is not met. This is known as the ‘frustration regression’ process.

McClelland’s Achievement Needs Theory (1961) perceives motivation as being influenced by three trait-like needs: achievement, power, affiliation and belonging. Traits are based on experience and can be developed and honed, for example, through training or positive reinforcement through hierarchical positioning.

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Herzberg (1996) is consistent with the earlier theories of Maslow, and, at its simplest, states that people are motivated towards things that make them feel good, and away from things that make them feel bad. There is plenty of empirical evidence to support this idea; if you consider going to the gym at 6am as an example, how does that make you feel? Most people will stay in bed because it makes them feel good. Herzberg applies this idea to the workplace.

two-factor-theory-herzberg-toolshero

Credit: https://www.toolshero.com/psychology/theories-of-motivation/two-factor-theory-herzberg/ 

Cognitive Theories

Cognitive Theories, or Process theories, view humans as actors who want to produce an impact and an effect on their environment, and that humans are fundamentally life-long learners who want to learn skills and new things. We have a need for new information, data and wisdom. Certainly, in my experience, no customer ever has ever said ‘We have enough reports and data now’. We always want to pitch forward with our data.

In this view, humans are essentially purposeful and individua. We understand our risks, and we make plans and set a course. These cognitive or process theories acknowledge choice, and discuss how behaviour is initiated, directed and re-directed, and terminated altogether.

The key theories include:

  • expectancy theory​
  • goal-setting theory​
  • equity theory.​

Vroom’s Expectancy Theory  postulates that individuals will behave or act in a certain way because they are motivated to select a specific behaviour over other behaviours. The choice depends on their expectations on what they perceived the outcome of the behaviour to produce.

f0070_01

Vroom’s Expectancy Theory

F (Motivation) = V x I x E

V = Valence or value an individual places on  the reward. ​

I = Instrumentality or the extent to which the individual believes carrying out an action will lead to positive reward/outcome. ​

E = Expectancy or the perception that a behaviour/effort will lead to desired level of performance.

Locke’s Goal Setting Theory (1968) may be something that you use a lot. Have you seen SMART objectives? They arise from Locke’s theory. Goals must be:​

  • specific and challenging​
  • capable of objective measurement​
  • attainable and time bound​
  • owned and accepted by employees.​
  • Prompt, precise feedback required so people know how they are doing​

Equity Theory (Adams, 1965) postulates that employees consider the inputs they bring to the work in relation to the outputs. It is a balance between inputs and perceived rewards they gain as a result of their inputs.  ​It is particularly important for performance appraisal and reward, since a perception of unfair or unjust treatment will be demotivating.

Does money motivate?

It is implied as a motivator in content theories e.g. Taylorism, Maslow, Locke  etc and therefore is implied as a motivator.​ Barber and Bretz (2000) suggest that money is among the most important factors for people when deciding on a job.​ Anecdotal evidence from exit interviews shows that money is the key reason why demotivated employees leave the job or they leave to earn more elsewhere.

Some theorists argue against the idea that it is a main motivator, such as eming, Herzberg, Kohn, Deci and Ryan, Pfeffer​. The theme here is that a job gives people meaning, purpose, commitment and engagement. Job satisfaction is also considered to be a primary motivator.

Some research shows that money can reduce the effectiveness of intrinsic engagement. For example, Deci et al (2001) found that “rewards as a motivational strategy is a risky proposition”.

A reasonable conclusion is that money is a motivator for some and most will not work without pay, but it depends on individual circumstances and other factors.​ “The question of whether money is a motivator that can lead to improved performance is a very complex one and the answer is by no means clear” (Latham 2007).

Here, we can combine expectancy and equity, by perceiving it as a vicious cycle for some individuals. The individual might be motivated to increase inputs, in the hope of getting increased rewards or outputs. People who are underpaid can see their role in terms of cost rather than value, thereby decreasing overall performance of the team because the competition within the team has been increased. If the value of the role is perceived as equitable to the cost, or amount of pay or reward, then the perception of fairness and balance is met.

Position and reward distribution need to be met fairly, or one team may not feel valued. If the reward distribution is perceived as being concentrated at C level at the expense of others, this can result in a perception of unfairness. There have been plenty of stories recently about overpaid C-suite members!

The reward mix is also important. The gender pay gap is well documented, and the finding is replicated across the world (Costa Dias, Joyce, and Parodi, F., 2018).

Conclusion

The reality is that motivation is a difficult and complex topic and there is the element of choice. That said, understanding people’s motivations can impact performance so there is a real need to understand this complex topic, in order to demystify people’s choices and make possible predictions and outcomes on their behaviour.

References

Adams, J. Stacy. “Inequity in social exchange.” In Advances in experimental social psychology, vol. 2, pp. 267-299. Academic Press, 1965.

Alderfer, C.P., 1969. An empirical test of a new theory of human needs. Organizational behavior and human performance4(2), pp.142-175.

Barber, A.E. and Bretz, R.D., 2000. Compensation, attraction, and retention. Compensation in organizations, pp.32-60.

Costa Dias, M., Joyce, R. and Parodi, F., 2018. The gender pay gap in the UK: children and experience in work. Institute for Fiscal Studies. https://www. ifs. org. uk/publications/10356.

Latham, G.P. 2007. Work motivation: History, theory, research, and practice ISBN 0 7619 2017 X; 337 pages. Thousand Oaks, CA: Sage

Locke, E.A., 1968. Toward a theory of task motivation and incentives. Organizational behavior and human performance3(2), pp.157-189.

Maslow, A.H., 1943. A theory of human motivation. Psychological review50(4), p.370.

McKenna, E.F., 2000. Business psychology and organisational behaviour: a student’s handbook. Psychology Press.

Vroom, V.H. and Yetton, P.W., 1973. Leadership and decision-making (Vol. 110). University of Pittsburgh Pre.

 

 

 

 

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