Griffin 9e IM Ch 10_edited

CHAPTER 10
Managing Employee Motivation and

Performance
CHAPTER SUMMARY
This chapter deals with employee motivation. The key topics discussed include the nature of motivation
and content, process, and reinforcement perspectives on motivation. Popular motivational strategies are
then illustrated, followed by a description of how organizations use reward systems to motivate
employees.
LEARNING OUTCOMES
After studying this chapter, students should be able to:
1. Characterize the nature of motivation, including its importance and basic historical perspectives.
2. Identify and describe the major content perspectives on motivation.
3. Identify and describe the major process perspectives on motivation.
4. Describe reinforcement perspectives on motivation.
5. Identify and describe popular motivational strategies.
6. Describe the role of organizational reward systems in motivation.
MANAGEMENT IN ACTION
Let the Games Begin
In the opening case, Bluewolf, a New York-based global consulting agency, decided to incorporate
gamification into the company. More specifically, Bluewolf wanted social gamification, the use of
games to enhance certain social behaviors, especially sharing. Bluewolf launched a three-part
#GoingSocial program aimed at increasing employees’ use of social media. As a result, blog postings
have increased and there is increased traffic to the company’s website. Bluewolf’s chief marketing
officer says the program gives its employees a megaphone to stream the company’s content to all of the
employees’ social networks.
Discussion Starter: Ask students how they feel about Bluewolf’s #GoingSocial campaign. Would they
relish the idea of a “free pass” to use social media during work time? Or would they somehow feel
“used” as a tool to promote the company?
LECTURE OUTLINE
I. The Nature of Motivation
A. Motivation is the set of forces that cause people to behave in certain ways.
Teaching Tip: Note that motivation reflects behavioral choices—people choose to work hard, to do
just enough to get by, or to do nothing at all.
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Chapter 10: Managing Employee Motivation and Performance 159
B. Individual performance is generally determined by motivation (the desire to do the job),

ability (the capability to do the job), and the work environment (the resources needed to do
the job). While the last two can be controlled by the manager, the first cannot.
Discussion Starter: Ask students to recall instances in which they have done an exceptionally good job
and to then describe the respective roles of motivation, ability, and the work environment in that
performance.
II. Content Perspectives on Motivation
Content perspectives are approaches that try to answer the question, “What factors in the
workplace motivate people?” Content perspectives deal with the first part of the motivation
process—needs and need deficiencies.
A. The Needs Hierarchy Approach
Teaching Tip: Many students will have covered Maslow in other courses (e.g., psychology, marketing,
etc.). You might consider asking for a show of hands and skimming or skipping this material if all of
your students have already covered it.
1. Maslow’s hierarchy of needs suggests that people must satisfy five groups of needs in
order—physiological, security, belongingness, esteem, and self-actualization.
a. Physiological needs are things such as food, sex, and air, which represent basic
issues of survival and biological function. In organizations, physiological needs
are generally satisfied by adequate wages and the work environment itself.
b. Security needs include the desire for housing and clothing and the need to be free
from worry about money and job security. These needs can be satisfied in the
workplace by reasonable job continuity, an effective grievance system, and an
adequate insurance and retirement benefit package.
c. Belongingness needs include the need for love and companionship and the need
to be accepted by one’s peers. A manager can help satisfy these needs by
allowing social interaction and by making employees feel like part of a team or
work group.
d. Esteem needs include the need for a positive self-image and self-respect and the
need for recognition and respect from others. A manager can help address these
needs on an extrinsic level by providing symbols of accomplishment, such as job
titles and nice offices, and on an intrinsic level by providing challenging job
assignments and opportunities for the employee to feel a sense of
accomplishment.
e. Self-actualization needs involve realizing one’s potential for continued growth
and individual development. A manager can help an individual meet his or her
self-actualization needs by providing opportunities to participate in decision
making and learn new things.
Interesting Quote: “I used to do things for my people because I would try to protect them, but I
realized I was doing them a disservice. I was not giving them the opportunity to fail or achieve success,
which is something my bosses had always given me.” (Marnie Quinn, middle manager at Ford; quoted
in Fortune, April 10, 1989, p. 54)
2. Maslow suggested that people will remain at one level until that need is satisfied and
then move “up” to the next level and that people will not regress to earlier levels.
Group Exercise: Have students work in small groups and identify ways in which people might satisfy
each of the five need levels in Maslow’s hierarchy.
160 Chapter 10: Managing Employee Motivation and Performance
Extra Example: Maslow based his theory on research conducted on monkeys, then college students,
and then mental patients.
B. The Two-Factor Theory
1. Frederick Herzberg’s two-factor theory of motivation suggests that people’s
satisfaction and dissatisfaction are influenced by two independent set of factors—
motivation factors and hygiene factors.
a. Motivation factors are related specifically to the work content and include such
things as pay, job security, working conditions, and technical supervision.
b. Hygiene factors are related to the work environment and include such things as
achievement and recognition.
2. Herzberg asserted that satisfaction and dissatisfaction are not at opposite ends of a
single continuum but that they are each on a different continuum.
3. Herzberg argued that by providing hygiene factors at an appropriate level, managers do
not stimulate motivation but merely ensure that employees are “not dissatisfied.” Thus,
to simplify and motivate employees, managers must provide motivation factors.
Discussion Starter: Herzberg asserts that pay in and of itself does not motivate performance. At the
same time, pay may be a motivator as a symbol of a person’s worth or value to an organization. Solicit
students’ opinions about this idea.
Discussion Starter: Note that the two-factor theory suggests that people can be satisfied and
dissatisfied at the same time. Ask students whether they accept this premise.
Cross-Reference: Note that Herzberg’s theory is the basis for job enrichment, an alternative approach
to job design introduced and discussed in Chapter 6.
Discussion Starter: Ask students to critique Maslow’s hierarchy of needs and the two-factor theory,
discussing how they, as future managers, might apply one or the other in a work setting.
C. Individual Human Needs
Individual human needs play a role in motivation as well. Three in particular have been the
focus of research.
1. The need for achievement is the desire to accomplish a goal or task more effectively
than in the past.
2. The need for affiliation consists of a desire for human companionship and acceptance.
3. The need for power gives workers the desire to be influential in a group and to control
one’s environment.
Discussion Starter: Ask students to assess their own needs for achievement, affiliation, and power.
Extra Example: Michael Dell, founder of Dell Technologies, clearly has a high need for achievement
and may have a strong need for power as well.
III. Process Perspectives on Motivation
Process perspectives focus on why people choose certain behavioral options to satisfy their needs
and how they evaluate their satisfaction after they have attained those goals. Three useful process
perspectives on motivation are the expectancy, equity, and goal-setting theories.
Teaching Tip: Emphasize to students the “how” aspect of the process perspectives on motivation.
A. Expectancy Theory
1. Expectancy theory suggests that motivation depends on how much we want
something and how likely we think we are to get it.
Discussion Starter: Ask students to recall an instance in which they did not pursue something they
wanted because they felt they had little or no chance of achieving it.
2. Expectancy theory rests on four basic assumptions.
a. It assumes that behavior is determined by a combination of forces in the
individual and in the environment.
b. It assumes that people make decisions about their own behavior in organizations.
c. It assumes that different people have different types of needs, desires, and goals.
d. It assumes that people make choices from among alternative plans of behavior,
based on their perceptions of the extent to which a given behavior will lead to
desired outcomes.
3. The expectancy model suggests that innovation leads to effort and that effort,
combined with employee ability and environmental factors, results in performance.
Performance, in turn, leads to various outcomes, each of which has an associated value,
called its valence.
4. Effort-to-Performance Expectancy
Effort-to-performance expectancy is the individual’s perception of the probability
that effort will lead to high performance. For motivated behavior to occur, the effort-
to-performance must be greater than 0.
5. Performance-to-Outcome Expectancy
Performance-to-outcome expectancy consists of the individual’s perception that
performance will lead to a specific outcome. For motivated behavior to occur, the
performance-to-outcome expectancy must be greater than 0.
6. Outcomes and Valences
Individuals recognize that their behavior will result in a variety of outcomes
(consequences of behaviors in an organizational setting, usually rewards). Also, each
outcome has an associated valence (an index of how much an individual values a
particular outcome; the attractiveness of the outcome to the individual).
a. If they want the outcome, the valence is positive.
b. If they do not want it, the valence is negative.
c. The valence is zero if they are indifferent to the outcome.
d. For motivated behavior to occur, the sum of the valences for the outcomes must
be greater than 0.
7. The Porter–Lawler Extension
The Porter–Lawler extension to expectancy theory suggests that high performance may
lead to satisfaction based on the rewards given for high performance. If an individual
views the rewards as equitable for the performance, he or she is satisfied. The Porter–
Lawler extension reverses the causality implied by expectancy theory, in which
satisfaction leads to performance.
B. Equity Theory
1. Equity theory contends that people are motivated to seek social equity in the rewards
they receive for performance.
2. To determine equity, a person compares his or her ratio of outcomes (pay, recognition,
promotions, and so forth) and inputs (time, experience, effort, and so forth) to someone
else’s. The results can be a feeling of equitable rewards, too few rewards, or too many
rewards.
a. People who feel underrewarded try to reduce the inequity. Such an individual
might decrease his or her inputs by exerting less effort, increase his or her
outcomes by asking for a raise, distort the original ratios by rationalizing why it
exists, try to get the other person to change his or her outcomes or inputs, leave
the situation, or change the person of comparison.
b. An individual who feels overrewarded might increase his or her inputs by
exerting more effort, reduce his or her outcomes by producing fewer units, distort
the original ratios by rationalizing, or try to reduce the inputs or increase the
outcomes of the other person.
Discussion Starter: Equity theory predicts that if people believe that they are being overpaid, they will
take some action to reduce their feelings of inequity. Ask students what they think about this prediction.
Discussion Starter: Have students recall situations in which they have felt both equity and inequity.
Then ask them to diagram each instance in terms of its outcomes and inputs and those of a comparison
other.
Cross-Reference: Note the similarities between the equity process and the notion of psychological
contracts, as discussed in Chapter 9.
Extra Example: An excellent example of equity theory occurs at the beginning of each new NFL
season. Top draft choices fresh out of college will sign big contracts, and disgruntled veterans will
almost immediately start calling for their own contracts to be renegotiated.
C. Goal-Setting Theory
1. The goal-setting theory of motivation assumes that behavior is a result of conscious
goals and intentions. By setting goals for people in the organization, a manager should
be able to influence their behavior.
2. In the original version of goal-setting theory, two specific goal characteristics—goal
difficulty and goal specificity—were expected to shape performance.
a. Goal Difficulty
Goal difficulty is the extent to which a goal is challenging and requires effort.
b. Goal Specificity
Goal specificity is the clarity and precision of the goal.
3. The expanded goal-setting theory of motivation includes goal difficulty and goal
specificity, plus two additional factors—goal acceptance and goal commitment.
a. Goal acceptance is the extent to which a person accepts a goal as his or her own.
b. Goal commitment is the extent to which a person is interested in reaching the
goal.
Teaching Tip: Point out the similarities between the expanded goal-setting theory of motivation and
the expectancy theory.
Extra Example: The Coca-Cola Company, Nike, PricewaterhouseCoopers, and Microsoft all
successfully use goal setting as innovation.
IV. Reinforcement Perspectives on Motivation
Reinforcement theory argues that behavior that results in rewarding consequences is likely to be
repeated, whereas behavior that results in punishing consequences is less likely to be repeated.
A. Kinds of Reinforcement in Organizations

There are four basic kinds of reinforcement that can result from behavior.
1. Positive reinforcement strengthens desired behavior by giving a reward or a positive
outcome after a desired behavior is performed. Praise, promotions, and pay increases
are all examples of positive reinforcement.
Teaching Tip: Explain the role of reinforcement in the classroom as you provide grades, verbal
compliments, criticisms, etc., in response to student behavior.
Teaching Tip: Also note the reinforcing consequences that student behaviors have on instructors. For
example, good class attendance and student enthusiasm provide positive reinforcement for instructors.
2. Avoidance strengthens the desired behavior by allowing the employee to avoid an
unpleasant consequence if a certain behavior was not performed. Avoidance occurs, for
example, when an employee comes to work on time to avoid a reprimand.
3. Punishment weakens undesired behavior by providing an unpleasant consequence
after a person exhibits the unwanted behavior. Reprimands and other disciplinary
measures are examples of punishment.
4. Extinction weakens a behavior by not providing reinforcement of any kind when the
behavior is exhibited. A manager who ignores frivolous emails from subordinates in
order to encourage them to quit sending the messages is using extinction.
B. Providing Reinforcement in Organizations
1. Not only is the kind of reinforcement important but also so is when or how often it
occurs.
a. A fixed-interval schedule provides reinforcement at fixed intervals of time,
regardless of behavior.
(1) An example of this schedule is the weekly or monthly paycheck.
(2) This method provides the least incentive for good work because
reinforcement does not depend on performance.
b. A variable-interval schedule provides reinforcement at varying intervals of
time.
(1) This schedule is appropriate for praise or other rewards based on visits or
inspections.
(2) This schedule is more motivating than a fixed-interval schedule because
employees do not know when the reinforcement will occur and thus they
tend to maintain a reasonably high level of effort all the time.
c. A fixed-ratio schedule gives reinforcement after a fixed number of behaviors,
regardless of the time that elapses between behaviors.
(1) An example of this schedule is a bonus after a certain number of sales.
(2) Under this arrangement, motivation will be relatively high because each
behavior gets the employee closer to the reinforcement.
d. A variable-ratio schedule varies the number of behaviors needed for each
reinforcement.
(1) The variable-ratio schedule is the most powerful schedule in terms of
maintaining desired behaviors.
(2) However, a variable-ratio schedule is difficult (if not impossible) to use for
formal rewards, such as pay.
Extra Example: Casinos, such as Bally’s and Harrah’s, and state lotteries use a variable-ratio schedule
to lure people to gamble and buy lottery tickets.
2. Organizational behavior modification (OB Mod) is a method for applying the basic
elements of reinforcement theory in an organizational setting. Behavior that should be
increased and decreased are identified and tied to specific forms or kinds of
reinforcement.
Group Exercise: Have student groups design a motivational system that a manager might use that is
based on the concepts and principles of reinforcement.
V. Popular Motivational Strategies
A. Empowerment and Participation
1. Empowerment and participation represent important methods that managers can use to
enhance employee motivation.
a. Empowerment is the process of enabling workers to set their own work goals,
make decisions, and solve problems within their sphere of responsibility and
authority.
b. Participation is the process of giving employees a voice in making decisions
about their own work.
2. The role of participation and empowerment in motivation can be expressed in terms of
both content perspectives and expectancy theory.
a. Employees who participate in decision making may be more committed to
executing decisions properly.
b. The successful process of making a decision, executing it, and then seeing the
positive consequences can help satisfy a person’s need for achievement, provide
recognition and responsibility, and enhance self-esteem.
c. Being asked to participate in organizational decision making may also enhance
an employee’s self-esteem.
d. By participating in decision making, employees may better understand the
linkage between their performance and the rewards they want most.
B. Alternative Forms of Working Arrangements
Many organizations today are providing employees with a variety of alternative work
arrangements.
1. Variable Work Schedules
A compressed work schedule is working a full 40-hour week in fewer than the
traditional five days.
Extra Example: The U.S. Government Accountability Office offers its employees the option of
working a compressed workweek for each pay period. Employees may put in eight 9-hour days, then
one 8-hour day before taking a day off, or they can choose to work four 10-hour days each week.
2. Flexible Work Schedules
Flexible-work schedules, or flextime, allow employees to select, within broad
parameters, the hours they work.
Discussion Starter: Ask students how they would feel about working different forms of modified
workweeks.
3. Job Sharing
Job sharing allows two part-time employees to share one full-time job.
4. Telecommuting
Telecommuting allows employees to spend part of their time working offsite, usually
at home.
Extra Example: A 2017 study found that more than 75 percent of companies offer some form of
alternative work arrangement. The most common arrangement is part-time hours (offered by 61 percent
of companies surveyed), followed by flextime (offered by 33 percent), and telecommuting (offered by
30 percent).
VI. Using Reward Systems to Motivate Performance
An organizational reward system is the formal and informal mechanisms by which employee
performance is defined, evaluated, and rewarded. Rewards that are tied specifically to
performance have the greatest potential for enhancing both motivation and actual performance.
Cross-Reference: Note that the design of reward systems is a part of human resource management, as
discussed in Chapter 8.
A. Merit Reward Systems
1. Merit pay refers to pay awarded to employees on the basis of the relative value of
their contributions to the organization.
2. Merit pay plans base as least some meaningful portion of compensation on merit. The
most general form of merit pay plan is annual salary increases.
B. Incentive Reward Systems
1. A piece-rate incentive plan is used when an organization pays an employee a certain
amount of money for every unit she or he produces. This is the simplest type of
incentive system.
2. Incentive Pay Plans
a. Individual incentive plans reward individual performance at the time when high
performance occurs. They are most likely to be used in cases in which
performance can be objectively assessed in terms of number of units of output or
similar measures, rather than on a subjective assessment of performance by a
superior.
b. Sales commissions, in which an agent is paid a percentage of his or her sales over
a period of time, is perhaps the most common form of individual incentive.
3. Other Forms of Incentive
Other forms of incentives include nonmonetary incentives, such as additional time off
or a company-paid vacation.
4. A major advantage of incentives relative to merit systems is that incentives are
typically a one-time reward and do not accumulate by becoming part of the
individual’s base salary.
Global Connection: Workers in Japan receive an average of 25 percent of their total pay in the form of
flexible bonuses. In the United States, the average is only 1 percent.
C. Team and Group Incentive Reward Systems
1. Common Team and Group Reward Systems
a. Gainsharing programs are designed to share the cost savings from productivity
improvements with employees. The underlying assumption of gainsharing is that
employees and the employer have the same goals and thus should appropriately
share in incremental economic gains.
b. The Scanlon plan is similar to gainsharing programs, but the percentage of
award is very high, typically between two-thirds and three-fourths of the total
cost savings, and the award is given to all workers, not just to the team or group
that suggested and developed the ideas.
2. Other Types of Team and Group Rewards

a. In some cases, incentives distributed at the team or group level are based on the
existing salary of each employee, with incentive bonuses being given on a
proportionate basis. In other settings, each member of the team or group receives
the same incentive pay.
b. Nonmonetary rewards may be given at the team or group level.
c. Profit sharing creates a pool of money for annual employee bonuses, based on
corporate profits. Rewards may be given at the end of a time period or kept in an
account until retirement.
Extra Example: Edward Jones, First American, and Southwest Airlines are examples of companies
that offer profit-sharing plans.
d. Employee stock ownership plans (ESOPs) are a means of gradually giving
employees a major stake in ownership of a corporation. A portion of stock is
transferred to employees as the company builds up profits.
Extra Example: With over 190,000 employees, Florida-based grocer Publix is the largest employee-
owned firm in the United States. All Publix employees, regardless of their position in the company,
receive 8.5 percent of their annual salary in the form of company stock after they have worked for the
company for more than 12 months and worked over 1,000 hours. As of 2017, Publix was worth more
than $32 billion.
D. Executive Compensation
The top-level executives of most companies have separate compensation programs and
plans.
1. Standard Forms of Executive Compensation
a. The base salary of an executive is a guaranteed amount of money that the
individual will be paid.
b. The traditional method of incentive pay for executives is in the form of bonuses.
(1) Bonuses are usually determined by the organization’s performance.
(2) At the end of the year, some portion of a corporation’s profits may be
diverted into a bonus pool. Executives usually receive a bonus expressed as
a percentage of this bonus pool. The exact distribution of the bonus pool is
usually specified ahead of time.
2. Special Forms of Executive Compensation
a. A stock option plan is established to give senior managers the option to buy
company stock in the future at a predetermined fixed price.
Extra Example: Companies that offer stock option plans to its top managers include The Cheesecake
Factory and Cadence.
(1) The basic idea underlying stock option plans is that if the executives
contribute to higher levels of organizational performance, then the company
stock should increase in value. Then the executive will be able to purchase
the stock at the predetermined price, which should be lower than its future
market price.
(2) Stock options are popular because they align the interests of the managers
with those of the stockholders and they do not cost the organization much.
(3)
There are numerous concerns with using stock options as incentives for
executives.
(a) By not carrying stock options as liabilities, organizations may be
overstating the value of the company, which can help raise the stock
price.
(b) Executives may be tempted to make decisions that provide a short-
term boost in stock prices to benefit themselves but that actually hurt
the company in the long run.
(c) If stock prices drop below the option price, executives may find that
their options are worthless.
b. Executives also receive many other types of compensation, including private club
memberships, access to company recreational facilities, low- or no-interest loans,
and so forth.
3. Criticisms of Executive Compensation
There are two important criticisms of executive compensation in the United States
today.
a. Many feel that executive compensation, averaging over $1 million, is simply too
high, particularly in comparison to the salary of workers.
b. There often seems to be little or no relationship between the performance of the
organization and the compensation paid to its senior executives.
E. New Approaches to Performance-Based Rewards
1. Some organizations are allowing employees to have a greater say in how rewards are
determined and allocated.
2. Some firms customize rewards to each individual employee’s needs.
Cross-Reference: Note the relevance of designing reward systems to various theories of motivation as
discussed throughout earlier sections of this chapter.
END-OF-CHAPTER
Questions for Review

1. Summarize Maslow’s hierarchy of needs and the two-factor theory. In what ways are they similar
and in what ways are they different?
Maslow’s hierarchy of needs claims that individuals have five different levels of needs and they
work to fulfill their needs starting at the lowest level. The levels are, from lowest to highest:
(1) physiological, (2) security, (3) belongingness, (4) esteem, and (5) self-actualization. Maslow
believed that individuals would fulfill one need, then move on to the next, always in order. Once
the need is satisfied, it ceases to act as a primary motivational factor. In Maslow’s theory,
satisfaction is a single dimension and results when workers are able to fulfill all of their needs.
The two-factor theory also hypothesizes that individuals fill needs, but the needs are defined as
(1) hygiene factors, such as pay, security, and good working conditions; and (2) motivation
factors, such as achievement and recognition. In Herzberg’s theory, there are two distinct
continua: satisfaction and dissatisfaction. Satisfaction results when motivation factors are filled.
When hygiene factors are provided, workers feel no dissatisfaction.
2. Compare and contrast content, process, and reinforcement perspectives on motivation.

The content theories of motivation focus on why people are motivated, whereas the process and
reinforcement perspective focus on how people are motivated. In both the reinforcement and the
process perspectives, individual rewards are seen as fulfilling the needs discussed in the content
theories; however, the actual decision to perform is outlined in the process perspective.
3. Using equity theory as a framework, explain how a person can experience inequity because he or
she is paid too much. What are the potential outcomes of this situation?
Equity theory contends that people are motivated to seek social equity in the rewards they receive
for performance. The theory suggests that people view their outcomes and inputs in the form of a
ratio and then compare it to someone else’s ratio. As a result of comparisons, three conditions
may result: the individual may feel equitably rewarded, underrewarded, or overrewarded.
Individuals prefer equity, so people who perceive inequity will either rationalize away the
difference or take action to right the inequity, such as by working harder.
4. Explain how goal-setting theory works. How is goal setting different from merely asking a worker
to “do your best”?
Goal-setting theory proposes that workers are most motivated when they know exactly what they
are expected to achieve (goal specificity) and when the goal is somewhat challenging but not
impossible to achieve (goal difficulty). The expanded theory addresses additional areas: the need
for employees to accept the goal as their own and feel a commitment to achieving it. Asking a
worker to “do his or her best” will be motivating for some individuals who have a high need for
achievement, but most workers will be more motivated by being given a specific and challenging
goal.
5. Describe some new forms of working arrangements. How do these alternative arrangements
increase motivation?
Variable work schedules allow workers to work a 40-hour week outside of the traditional
“Monday to Friday, 9-to-5” hours of most businesses. Flexible work schedules give even more
freedom for each employee to design their own optimum schedule. Job sharing allows two part-
time workers to share one full-time job. Workers who telecommute can work from home or any
other location by using email and the Internet to communicate with their office. Anything that
makes workers’ lives more convenient or gives workers control over how they work is likely to be
motivating.
Questions for Analysis

1. Choose one theory from the content perspectives and one from the process perspectives. Describe
actions that a manager might take to increase worker motivation under each of the theories. What
differences do you see between the theories in terms of their implications for managers?
Students will choose different theories, so answers will vary. Students should note that content
theories imply that managers should diagnose worker needs and then attempt to fill those needs,
whereas process theories claim that managers must engage in a variety of behaviors such as
communication, setting goals, or giving punishment.
2. Can factors from both the content and the process perspectives be acting on a worker at the same
time? Explain why or why not. Whether you answered yes or no to the previous question, explain
the implications for managers.
Clearly, both content and process theories can be operating at the same time, because there is
nothing in the theories that precludes this conclusion. For managers, the implication is that they
should be aware of the variety of theories that can explain worker motivation. Greater awareness
and skill in applying the theories make it more likely that the manager will be effective in
increasing motivation.
3. How do rewards increase motivation? What would happen if an organization gave too few
rewards? What would happen if it gave too many?
Underlying every motivation theory is the premise that individuals act in certain ways in order to
gratify their needs. Rewards can fill those needs directly, such as when a worker uses his or her
pay to buy groceries, filling a need for food. Rewards can also fill needs indirectly, such as when a
worker’s promotion leads to greater status and respect from others, filling a need for power.
Organizations that do not offer adequate rewards will have employees who are unmotivated,
leading to low performance, absenteeism, negative attitudes, and other undesirable outcomes.
Organizations that offer too many rewards, on the other hand, may find that rewards lose their
power to motivate. For example, if a manager praises every worker every day, regardless of
performance, then there is little incentive for the workers to increase their performance.
4. Think about the worst job you have held. What approach to motivation was used in that
organization? Now think about the best job you have held. What approach to motivation was used
there? Can you base any conclusions on this limited information? If so, what are they?
One likely response is the use of Herzberg’s two-factor theory. Note whether the response shows
hygiene factors to be present on the “worst” job and motivation factors to be present on the “best”
job. Another approach would be positive reinforcement for the best job and punishment for the
worst job. A complex answer might involve expectancy theory—intensive training and a clearly
defined reward system in the best job, and being hired and thrown into a position in the worst job.
5. Consider a class you have taken. Using just that one class, offer examples of times when the
professor used positive reinforcement, avoidance, punishment, and extinction to manage students’
behavior.
Examples will vary, but students will see that most professors, like most managers, use a variety
of reinforcement techniques, depending on the particular situation. Reinforcement theory is most
effectively applied when a manager uses all of the four techniques.
Experiential Exercise
Motivation at Bluefield
a. Purpose
This exercise helps students to use motivational theories discussed in this chapter and apply
them to a practical situation.
b. Format
Read the personnel files of the seven supervisors individually. Then, as a small group, fill
out the Need/Motivation Worksheet. After discussion within the group, present the group’s
findings to the class.
c. Follow-Up
All people have needs, and those needs make people pursue different goals in an effort to
satisfy their needs. Students’ responses on the Worksheet will vary and a discussion would
help clarify their reasons for assigning specific scores to the seven supervisors.
Building Effective Decision-Making Skills

a. Exercise Overview
Students exercise their decision-making skills by researching a career path and making
choices about that path.
b. Format
This decision-making skills exercise should be done outside of class by individuals. It will
take students about 10 minutes to complete, although research will take longer.
c. Exercise Task
1. Consider the position that you’d like to hold at the peak of your career. It may be CEO,
owner of a chain of clothing stores, partner in a law or accounting firm, or president of
a university. Then again, it may be something less lofty. Whatever it is, write it down.
2. Now describe a career path that will lead you toward that goal. It may help to work
“backward”—that is, starting with your final position and working backward in time to
some entry-level job. If you aren’t sure about the career path that will lead to your
ultimate goal, do some research. Talk to someone in your selected career field, ask an
instructor who teaches in it, or go online. The website of the American Institute of
Certified Public Accountants, for example, has a section on “Career Resources,” which
includes information about career paths and position descriptions for accounting.
3. Write down each step in your path on a card or a sheet of paper.
4. If, like Lee Iacocca, you were to carry this piece of paper with you and refer to it often
as you pursued your career goals, do you think it would help you achieve them? Why
or why not?
Students will choose a variety of goals and an even larger variety of paths to achieve
those goals. However, most will acknowledge that an explicit consideration and
recording of career goals could be useful. In addition, the constant reminder may be
helpful as students make choices and accomplish tasks in their chosen fields.
Skills Self-Assessment Instrument

Assessing Your Needs
Note: This skills exercise is located in MindTap®.
a. Purpose
The purpose of this self-assessment is to help students understand their own judgments about
their personal needs that affect motivation.
b. Format
Students should complete the assessment individually, but class discussion should cover
content from the chapter.
c. Scoring and Interpretation
Manifest needs—achievement, affiliation, aggression, autonomy, exhibition, impulsivity,
nurturance, order, power, and understanding—are those covered by this self-assessment.
People seem to have a different profile of needs underlying their motivations at different
ages. The more any one or more of these needs are descriptive of you, the more you see that
particular need as being active in your motivational makeup. Students should look at how
they scored each question in the assessment to see how that particular need affects their
motivation.
On the Job Video

Mike Boyle Strength & Conditioning: Motivating Employees
Note: This video case is located in MindTap®.
1. Describe Mike Boyle’s attitude toward employee motivation.
Mike is following the principles of goal-setting theory. He assumes that behavior is a result of
conscious goals and intentions. As Mike explains, “I’m like the conductor at a symphony. If I
have people I need to yell and scream at, I need to get new people.” He tries to meet with
employees and have them set goals and then tries to help them reach their goals. Employees like
Anna feel that they benefit from Mike Boyle’s expertise and experience.
2. How does Mike Boyle increase job satisfaction among employees?
There are many motivators at Mike Boyle Strength & Conditioning. Employees are given
opportunities for professional growth through education. There are frequent staff meetings to
educate employees, as well as opportunities to attend seminars all over the country. Above all, the
goal is to provide a work environment that allows employees “an opportunity to do what they do
well.” Mike keeps challenging the employees to reach their goals.
3. Which needs are met at Mike Boyle’s gym?
By creating a positive and productive work environment, Mike Boyle meets his employees’ need
for affiliation, the desire for human companionship and acceptance. As Marco explains, there is a
tremendous amount of “pride” and “respect” among strength and conditioning professionals for
Mike Boyle’s gym. Employees enjoy the status of working at a premier establishment in the
fitness industry.
By sending employees to seminars nationwide, Mike helps employees fulfill their need for
achievement, the desire to accomplish a goal or task more effectively than in the past. They
improve their performance by incorporating what they have learned into their jobs.
By allowing employees to make decisions about training individual clients, Mike Boyle meets his
employees’ need for power, the desire to be influential in a group and to control one’s
environment. Mike never tries to micromanage his employees and operates his gym in an
atmosphere of trust.
Do Happy Workers Make for Richer Companies?

Note: This video case is located in MindTap®.
1. Process theories on motivation include goal setting, equity theory, and expectancy theory. Of
the three process theories, which do you feel is likely to be the leading factor in employee
satisfaction at any one of the companies on the Great Places to Work list?
Goal setting is likely a factor at any of the listed Great Places to Work, however one of the list
determinants is equity and fairness. Equity theory focuses on individuals’ perceptions of how
fairly they are treated compared with others. People evaluate equity by a ratio of inputs to
outcomes; equity exists when personal ratios are equal when compared to others. Expectancy
theory is the relationship among the individual’s effort, performance, and the desirability of
outcomes associated with high performance. As stated in the video, studies show that what
employees want is the exact opposite of what managers think they want. If the outcomes for effort
and performance are not attractive to the employee, the valence, or value of outcomes will not
motivate the employee. Companies ranking high in the Great Places to Work list likely model all
three process theories, but they most likely treat employees equally and tailor rewards to employee
needs.
2. At the end of the video, one commentator guesses as to what employees really want – less hours
and more pay. The guest states emphatically: No, absolutely not. Would less hours and more pay
be an intrinsic reward or an extrinsic reward? Do you agree with the guest that the tactic would not
work, or do you feel this is a great idea? Which process theory would this situation violate?
Less hours and more pay would be extrinsic rewards, those given by another person. Intrinsic
rewards are the satisfaction a person receives in the process of performing a particular action.
Studies examining motivation found that people give their best effort when the work itself interests
and excites them, when they feel that their work provides meaning and purpose, and when they feel
appreciated for their work and contributions. In addition to providing appropriate extrinsic
rewards, effective managers try to help people achieve intrinsic rewards from their work. The most
effective motivational programs typically involve much more than money or other extrinsic
rewards in order to create an environment in which people thrive. Students may cite the example
from the text of Gravity Payments and the perceived inequity in pay. Less hours and more pay
would violate the equity theory and would not work.
3. Companies on the list of Great Places to Work appear to motivate employees with the correct
incentives. Of the three important innovative approaches to motivation – empowerment,
engagement, and making progress – which do you feel are likely exhibited at any one of the
companies on the list?
It is likely the companies exhibit all three approaches. Organizations empower workers to varying
degrees, from a situation where managers encourage employee ideas but retain final authority for
decisions to a condition of full empowerment. Research shows that empowerment typically
increases employee satisfaction, motivation, and productivity. Employee engagement means that
people enjoy their jobs and are satisfied with their work conditions, contribute enthusiastically to
meeting team and organizational goals, and feel a sense of belonging and commitment to the
organization. Studies have identified a correlation between high levels of employee engagement
and company performance, including less turnover, greater profitability, and stronger employee
and customer loyalty. Recent research points to the importance of making progress toward goals as
a key to high motivation. People are most motivated when they have the opportunity to experience
achievement. All of these factors may play into the ‘Happy Worker Premium’ mentioned at the
start of the video.
MANAGEMENT AT WORK
Engaged to Be Motivated
Using Gallup survey results, the closing case presents the argument that if you graduate from college
you are less likely to be engaged in your work. While technically the statistics support this statement,
the case outlines several related factors. Does the problem lie with colleges or with the workplace? Not
surprisingly, the answer is both. Some feel this lack of engagement is a sign of students not planning a
clear career path. Others feel engaging in one’s job is more of a personal decision.
Case Questions
1. Consider each of the following perspectives on motivation: needs hierarchy, two-factor theory,
expectancy theory, equity theory, and goal-setting theory. How does each of these perspectives
depend upon learned motivation? On personal motivation?
Personal motivation is important for achieving the layers of Maslow’s hierarchy of needs.
Personal motivation may lead a person to seek a job offering the security needs that he or she
desires. Personal motivation may even satisfy the person’s belongingness needs themselves if the
manager is unable to fulfill those needs. Even the top two tiers require personal motivation to
apply for that higher-level job or continuing to grow in their job. The two-factor theory requires
personal motivation to achieve the motivation factors. Learned motivation could be used on the
hygiene factors. Personal motivation would play into expectancy theory if the person believed
there was a good chance of achieving the outcome. It would require learned motivation if the
person did not believe the outcome was an option. Personal motivation and learned motivation
could come into play if an employee perceives an imbalance in the equity theory. The worker will
try to correct the imbalance, and this may take motivation from both internal and learned
motivation. Goal-setting theory relies mainly on personal motivation but also some learned
motivation. Workers motivated to complete goals (personal) sometimes require some extra
motivation (learned) in order to achieve the tougher goals.
2. What about you? Which form of motivation—learned motivation or personal motivation—has
played a greater role in your pursuit of your goals, whether in school, at work, or in both areas?
Given this assessment of your own experience with motivation, which of the motivational
perspectives listed in Question 1 is most likely to help you in your work life? Whatever your
answers to these questions, be sure to give examples from your own experience.
Due to the personal nature of these questions, students’ answers will vary widely.
3. The theory that too few students get the help they need in setting clear career paths suggests that
colleges should provide more career counseling. However, according to the National Survey of
Student Engagement, only 43 percent of college seniors talked very often or often about career
plans with a faculty member or adviser; 39 percent did sometimes, and 17 percent never did. How
about you? Have you sought career advice or counseling from resources available at your school?
Do you plan to? Have you sought advice elsewhere? If so, where elsewhere and why elsewhere?
Student responses will vary.
4. The Gallup survey measured levels of engagement by asking respondents whether they agreed or
disagreed with several statements about postgraduation work experiences. Here are six of those
statements:
• I have opportunities to learn and grow.
• My opinions seem to count.
• I have the opportunity to do what I do best every day.
• I have the tools and resources I need to do my job.
• My supervisor encourages my development.
• I know what is expected of me.
List these six statements in their order of importance to you as probable factors in your
satisfaction with a job. Be prepared to discuss your priorities.
[Note: One of these statements proved to be the strongest predictor of workplace engagement
among all of the statements in the survey. Your instructor can tell you which one it is after you’ve
drawn up and discussed your list.]
The ordering of the statements will vary by student. The item “I have the opportunity to do what I
do best every day” is the strongest predictor of workplace engagement.
YOU MAKE THE CALL
Let the Games Begin

4. Consider each of the following perspectives on motivation: needs hierarchy, two-factor theory,
and reinforcement theory. How would each of these perspectives contribute to an understanding
of why gamification appears to work as a motivational strategy?
Note that all but one of these perspectives fall into the content category. What about process
perspectives—expectancy theory, equity theory, and goal-setting theory? Answering the same
question with regard to process perspectives would probably prove a little more difficult. Why? In
other words, explain what this exercise might tell us about some basic differences between content
and process perspectives.
When one considers needs hierarchy, two-factor theory, and reinforcement theory, each of these
perspectives contribute to understanding why gamification appears to work as a motivational
strategy. Gamification is about creating ways to extend relationships, drive customer loyalty, and
craft longer relationships.
The needs hierarchy approach is about providing those things that employees find valuable to
encourage positive work behavior. Some of these needs include appreciation, development,
identity, purpose, influence, and the sense of belonging and contributing. Providing these needs to
employees will encourage gamification.
The two-factory theory involves two categories: hygiene factors and motivation factors. Hygiene
factors are essential to employees, and although having them might not improve motivation, not
having them would lead to dissatisfaction. Motivation factors are those that yield positive
satisfaction and are known to motivate employees to provide superior performance. The two-
factor theory has a direct correlation with gamification.
Reinforcement theory deals with behavioral consequences. Employees decide on a behavior based
on known consequences, whether those consequences are positive in nature, punishment, or
extinction. Depending on the choice an employee makes, to drive gamification, there must be
reinforcement, whether positive or negative, in the workplace.
Content theory explains why humans change over time. Reviewing the three theories in the first
part of the exercise, one can understand how they play a part in content theory. Needs hierarchy,
two-factor theory, and reinforcement theory all involve employees’ needs to be motivated and to
feel a sense of belonging to their organization. However, it gets complicated because employee
needs do, in fact, change over time. A person might start out at his or her job in need of money
more than anything. As he or she has a family, benefits become important; and once the person
stays with his or her job, he or she might evolve and need more positive reinforcement. Because
employees change over time, companies need to be flexible to ensure they continue to meet the
needs of their employees and create a win-win environment.
5. Consider gamification in terms of incentive reward systems. In what sense, for instance, can a
gamification system be regarded as an incentive reward system, whether as an incentive pay plan
or as some other form of incentive? What, if any, advantages does it have over the various types
of incentive reward systems mentioned in the text? What disadvantages does it share?
Gamification offers the following advantages:
• It allows increased opportunities for employees to interact and learn from one another and to
share best practices through “friendly” competition.
• Collaboration is encouraged, which is very important since more companies are allowing
employees to work remotely.
• It creates an engaging work environment, keeping employees challenged rather than
allowing them to become complacent.
However, there are some disadvantages:
• Before considering gamification, it needs to be determined if it is relevant for meeting
company objectives.
• Gamification needs to be a fun addition to an employee’s role, not something to divert
attention or occur too frequently.
• Resources and budgeting are imperative to be able to partake in gamification.
6. The following table lists two categories of motivation that could be offered to people participating
in gaming activities:
Extrinsic Motivation Intrinsic Motivation
Earning money Receiving recognition
Earning points/badges/trophies Attaining a sense of personal achievement
Earning prizes Earning responsibility
Overcoming penalties Earning power
Succeeding in quests Having fun
Advancing on progress bars Gaining mastery
• Extrinsic motivation occurs when we’re motivated to perform a behavior or engage in an

activity in order to earn a reward or avoid a punishment.
• Intrinsic motivation occurs when we’re motivated to perform a behavior or engage in an
activity because it’s personally rewarding.
How about you? If your workplace launched a gamification program with rewards similar to those
offered by Bluewolf, would you say that you’re more likely to be motivated by extrinsic or
intrinsic rewards? What extrinsic rewards are you currently working for? What intrinsic rewards?
Students’ answers will vary.
4. In his list of tips for companies considering gamification, one professional in the motivational
field includes the following: “Don’t use money as a motivator. Introducing money automatically
makes the activity about money—other motivations, such as taking pride in a job well done or
collaborating as part of a team, are set aside.”
Certain versions of motivational theory based on needs support this conclusion. Some researchers,
for example, say that extrinsic rewards thwart intrinsic motivation because we perceive them as
external means of controlling our behavior. Intrinsic rewards, they argue, satisfy our
psychological needs for competence and recognition because they provide us—and others—with
information about our levels of performance.
What do you think? Does your personal experience suggest that this line of thinking is accurate?
Do you think of extrinsic rewards as a means of controlling your behavior? How important is
feedback about your level of performance? How about recognition for your level of performance?
Under what circumstances do you tend to find intrinsic motivation satisfying? Under what
circumstances is intrinsic motivation not enough to satisfy you?
Students’ answers will vary. With respect to the discussion of using extrinsic vs. intrinsic rewards,
most students will likely say that both rewards are needed. In some cases, intrinsic rewards may
be the only ones available. But when extrinsic rewards are offered, performance often increases,
especially if those rewards are attainable. Feedback is important, no matter what type of reward it
involves and must be given in a timely manner in order to be effective. Intrinsic motivation isn’t
satisfying when employees are performing at a high level and are not getting recognized for it.

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CHAPTER 10

Managing Employee Motivation and

B. Individual performance is generally determined by motivation (the desire to do the job),

A. Kinds of Reinforcement in Organizations

2. Other Types of Team and Group Rewards

Questions for Review

2. Compare and contrast content, process, and reinforcement perspectives on motivation.

Questions for Analysis

Building Effective Decision-Making Skills

Skills Self-Assessment Instrument

On the Job Video

Do Happy Workers Make for Richer Companies?

YOU MAKE THE CALL

Let the Games Begin

• Extrinsic motivation occurs when we’re motivated to perform a behavior or engage in an

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