Motivation and

Entrepreneurship Development
 Introduction
• The term ‘motivation’ has been derived from the word ‘motive’.
• Motive may be defined as an inner state of our mind that
activates and directs our behaviour.
• It makes us move to act.
• Motivation is something that moves the person to action and
continues him in the course of action already initiated.
• According to S. P. Robbins, “Motivation is the willingness to exert
high levels of effort towards organizational goals, conditioned by
the effort and ability to satisfy some individual need”. 
• Character tics of Motivation
– Motivation is internal feeling of a person.
– Motivation is a continuous process.
– Motivation varies with person and time.
– Motivation may be positive or negative.
Motivation theories
 Maslow’s need hierarch
theory
• We each have a hierarchy of needs that ranges
from "lower" to "higher." As lower needs are
fulfilled there is a tendency for other, higher
needs to emerge.
• Maslow’s theory maintains that a person does
not feel a higher need until the needs of the
current level have been satisfied.
• Maslow's hierarchy of needs is often shown in the shape of a pyramid:
basic needs at the bottom and the most complex need (need for self-
actualization) at the top.
 Cont…
1. Physiological needs (e.g. food, water, shelter, sleep): It includes
the most basic needs for humans to survive, such as air, water
and food. Maslow emphasized, our body and mind cannot
function well if these requirements are not fulfilled.
2. Safety and security (secure source of income, a place to live,
health and well-being): If the physiological needs are relatively
well contented, new needs will appear, the so called safety
needs. Safety needs refer to a person’s desire for security or
protection. 
3. Belongingness and love (integration into social groups, feel part
of a community or a group; affectionate relationships): If both
the physiological and the safety needs are fulfilled, the
affection, love and belongingness needs come into prominence.
Maslow claimed people need to belong and accepted among
their social groups.
 Cont…
4. Esteem (respect for a person as a useful, honorable human
being): Esteem means being valued, respected and
appreciated by others. Humans need to feel to be valued,
such as being useful and necessary in the world. Maslow
divided two types of esteem needs: a ‘lower’ version and a
‘higher’ version. The ‘lower’ version of esteem is the need
for respect from others: for example attention, prestige,
status and loving their opinion. The ‘higher’ version is the
need for self-respect: for example, the person may need
independence, and freedom or self-confidence.
5. Self-actualization (individual’s desire to grow and develop
to his or her fullest potential): It reflects an individual’s
desire to grow and develop to his/her fullest potential. 
 Herzberg's Motivation - Hygiene Two factor
theory
• During the 1950s, Frederick Herzberg proposed a theory of
employee motivation based on satisfaction.
• He conducted a research study by having interviews with 200
engineers and accountants working in eleven different firms in
U.S.A.
• Herzberg concluded that two separate factors influ­enced
motivation.
• These two classes of factors were associated with employee
satisfaction and dissatisfac­tion.
• Hence, his concept has come to be called Herzberg’s two-factor
theory. These factors are called hygiene fac­tors and motivators,
 Cont…
• Herzberg’s five factors of job satisfaction (motivating factors):
– achievement
– recognition
– work itself
– responsibility
– advancement
• Herzberg’s five factors of job dissatisfaction (hygiene factors –
deficiency needs):
– company policy and administration
– supervision
– salary
– interpersonal relationships
– working conditions
 McClelland – Need for achievement,
affiliation and power
• McClelland’s theory differs from Maslow’s and
Alderfer’s, which focus on satisfying existing
needs rather than creating or developing needs.
• The three motivators are:
– achievement: a need to accomplish and demonstrate
competence or mastery
– affiliation: a need for love, belonging and relatedness
– power: a need for control over one’s own work or
the work of others
Alderfer’s theory of existence, relatedness and
growth (ERG).
• Alderfer distinguished three steps or classes of needs:
existence, relatedness and growth.
– Existence needs: These include needs for basic material
necessities. In short, it includes an individual’s physiological and
physical safety needs.
– Relatedness needs: Individuals need significant relationships (be
with family, peers or superiors), love and belongingness, they
strive toward reaching public fame and recognition. This class of
needs contain Maslow’s social needs and external component of
esteem needs.
– Growth needs: Need for self-development, personal growth and
advancement form together this class of need. This class of
needs contain Maslow’s self-actualization needs and intrinsic
component of esteem needs.
 The Process theory
1. Vroom's expectancy theory.
2. Porter and lower model of motivation.
3. Equity theory.
 Vroom's expectancy theory
• The expectancy theory places an emphasis:
– on the process
– on the content of motivation, and
– integrates needs, equity and reinforcement theories.
• Vroom defines motivation as a process that governs our
choices among alternative forms of voluntary behaviour.
• The motivation to engage in an activity is determined by
appraising three factors. These three factors are:
– Expectancy: a person’s belief that more effort will result in success.
If you work harder, it will result in better performance.
– Instrumentality: the person’s belief that there is a connection
between activity and goal. If you perform well, you will get reward.
– Valence: the degree to which a person values the reward, the
results of success.
 Adam’s equity theory
• The equity theory states that people are motivated if
they are treated equitably, and receive what they
consider fair for their effort and costs.
• The theory was suggested by Adams (1965) and is
based on Social Exchange theory.
• At the workplace the workers put inputs into the job,
such as education, experience, effort, energy, and
expect to get some outcomes such as salary, reward,
promotion, verbal recognition, and interesting and
challenging work each in equal amounts
 Porter and lower model of motivation
• The Porter and Lawler theory of motivation is based on the
assumption that rewards cause satisfaction and that
sometimes performance produces reward. 
• They see good- performance leading to reward which lead to
satisfaction.
• It is a multi-variable model and explains the complex of
relationship among motivation, performance and satisfaction.
• They argue that satisfaction does not always lead to
performance.
• Rather is reverse is true, because people can become
complacent after having achieved satisfaction once.
• On the other hand, performance can lead to satisfaction if the
reward systems are effective
 Theories related with human
nature
• McGregor theory of X and Y.
• Ouchi’s theory Z.
• Contingency approach.
 McGregor theory of X and Y
• Theory of X
–  Theory X assumes that employees are naturally
unmotivated and dislike working, and this encourages an
authoritarian style of management. According to this
view, management must actively intervene to get things
done. 
– This style of management assumes that workers:
• Dislike working.
• Avoid responsibility and need to be directed.
• Have to be controlled, forced, and threatened to deliver what's
needed.
• Need to be supervised at every step, with controls put in place.
• Need to be enticed to produce results; otherwise they have no
ambition or motivation to work.
 Cont…
• Theory of Y
– Theory Y shows a participation style of
management that is de- centralized.
– It assumes that employees are happy to work, are
self-motivated and creative, and enjoy working
with greater responsibility.
– Take responsibility and are motivated to fulfill the
goals they are given.
– Seek and accept responsibility and do not need
much direction.
– Consider work as a natural part of life and solve
work problems imaginatively.
 Ouchi’s theory Z.
• Theory Z is an approach to management based upon a
combination of American and Japanese management
philosophies .
• 'Theory Z' focused on increasing employee loyalty to the
company by providing a job for life with a strong focus on
the well-being of the employee, both on and off the job
• Ouchi proposed that a Theory Z management approach
could lead to :
– Greater employee job satisfaction
– Lower rates of absenteeism and turnover
– Higher quality products
– Better overall financial performance of US firms.
 Cont…
• Features of theory Z
– Long term employment
– Participative decision making
– Slow promotions
– Stable and cohesive work environment
– Holistic concern
– Integrated organization