IBBM 2.

5 MOTIVATION
OUTLINE

• Motivation: Desire, effort and passion to achieve something.

(Business) Willingness to complete task with enthusiasm.
(Management) Getting someone to do something you want them to do
or as an individual wanting to do something for yourself.
o Intrinsic: People do an activity out of own desire for a
challenge, stimulation or satisfaction.
o Extrinsic: People participate in activity because of benefits and
rewards or fear of punishment.
• Motivational Theories
o Taylor: Principles of Scientific Management –Employees
are motivated by money. Motivation by offering more money for
more production. Focused on division of labor and
standardization. Differentiated piecework-payment based on
standard level of output and would receive another rate if level
was exceeded.
- Disadvantage: can’t measure output for all jobs, doesn’t
take into account creativity.
o Maslow: Hierarchy of Needs

o Job: Camp counselor.

o Needs: Physiological-proper meals, adequate
shelter/comfortable bed to sleep in
Security-No threats to my health/safety, medical benefits/care
Social-Team building activities with co workers, sense of
community
Esteem-Ability to lead my own activities/run a cabin by myself
and lead hikes by myself, promoted to counselor instead of co-
counselor
o McGregor: Devised theory x and theory y to represent the different
assumptions that managers have about their employees. Believes that the
 beliefs managers have about their worker’s attitudes directly influences
their management style
o Theory x- Negative management attitude about workers.
Get clear instructions, supervision, do not enjoy work.
Authoritarian management style, follow scientific
management approach.
• Workers are motivated by money
• Workers are lazy and dislike work
• Workers are selfish and ignore the needs of
organizations, avoid responsibility and lack of
ambition
• Only way to get people to work is using strict
control
o Theory y- Managers have a positive approach. They
think workers enjoy work and get job satisfaction.
Democratic and decentralized approach is followed.
• Workers have different needs which motivate them
• Workers can enjoy work
• If motivated, workers can organize themselves and
take responsibility
• Management should create a situation where
workers can show creativity and apply their job
knowledge.
o Get together in a pair. Look at the two models of human
behavior as identified by McGregor.
o Get a piece of large paper and divide it into two halves. At the
top of one put 'Theory X Manager' and at the top of the other
put 'Theory Y Manager'.
o Imagine that you are a Theory X manager, that you believe
workers are basically lazy. Try to list as many different ways that
you can think of to get people to do the jobs you need doing.
o Now put your Theory Y manager's hat on and try and think
about what motivation strategies you could use if you believe
workers enjoyed work and wanted to do their jobs without
threat.

o Herzberg: dscribes the cause of satisfaction and dissatisfaction

in the workplace. Two factors cause satisfaction or
dissatisfaction.

1. Motivation factors: Factors which give workers

job satisfaction such as recognition for their effort
a. Sense of achievement
b. Chance of promotion
c. Chance of improvement
d. Recognition of effort
e. Responsibility
f. Nature of job itself
 2. Hygiene Factors: factors that lead tow workers
being dissatisfied such as pay or conditions
a. Pay
b. Conditions
c. Company policy
d. Relationships with higher levels of hierarchy
e. Inability to develop
f. Feelings of inadequacy
• Hertzberg suggested that managers could achieve worker
motivation through three key areas
1. Job Enlargement: giving workers more variety
2. Job Enrichment: giving workers more complex and
challenging tasks
3. Job Empowerment: delegation decision making
power to workers over their areas of work.

• Financial Motivation: ways that businesses can motivate workers by

using some form of monetary reward
o Wages:
o Time rates: used when workers are rewarded for the
amount of time they spend at work.
• Useful when a business wants to employ workers to
do a specialist or difficult task that should not be
rushed
• Useful when working out the pay of service sector
employees or people working in groups.
o Piece rates: Employees are paid for the amount of work
they do. Known as payment by results- link spay to
output.
• Problems: employees have no basic pay to fall back
on
• Disputes over what rate should be paid
• Feel that method encourages workers to sacrifice
quality in favor of higher rewards
• Wages are a VARIABLE cost
o Salary: a set/fixed annual rate paid on a monthly basis.
o Disadvantages:
• It’s not easy to distinguish the effort or output of
different workers
• There is little incentive to work harder.
o Salaries are fixed costs
o Commission: Employees are paid a percentage of the value of
each good or service that is sold.
o Limitations:
• Added pressure to sell at a faster pace. Quality may
suffer
• Lack of income security
o Profit-related pay:
 o The higher the firm’s profit, the greater the pay received
by employees
o Also known as profit sharing
o Used to strengthen employee loyalty and foster teamwork
o Drawbacks:
• Share may be too small to motivate employees
• Individual efforts are not recognized.
o Performance related pay:
o Link annual salary of an employee to their performance
on the job
o Causes of PRP:
• Organizations seek to tie pay increases to measure
of business performance
• New focus on the individual employee and rewards
which reflect their performance and circumstances
o PRP can be paid through:
• Performance bonuses
• Loyalty bonus
• Pay raise
o Share ownership:
o Business offers employees the possibility of purchasing
shares in the company
• Share scheme:
o Savings related- allows an employee to save
each month hen purchase shares at stated
value when offered
o Dividends are paid if company does well
o Fringe benefits:
o Benefits in addition to wages or salary.
o Examples:
• Free meals at office cafeteria
• Company car
• Retirement fund
o Advantage: encourages loyalty
o Disadvantage: large cost involved
• Non-financial motivation
o Job enlargement
o Job rotation
o Job enrichment
o Empowerment
o Teamwork
• Characteristics of effective motivators: