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I. The Concept of Motivation

1. What Motivates People ?

2. The Motivational Process in Organizations

II. The Expectancy Theory of Motivation

1. Valence of Rewards

2. Performance-Reward Instrumentality

3. Effort-Performance Expectancy

III. Developing Motivational Principles

1. Matching Rewards to Employee Needs

2. Matching Rewards to Performance

3. Matching Jobs to Employees




People join and work in organizations to satisfy their needs. They are attracted to organizations that have the means of satisfying their needs. These means are called incentives of rewards; organizations use them to induce people to contribute their efforts toward achieving organizational goals. The continued existence of an organisation depends on its ability to attract and motivate people to achieve these personal and organizational goals.


Motivation is defined as goal-directed behavior. It concerns the level of effort one exerts in pursuing a goal. Managers are concerned with this concept because it is closely related to employee satisfaction and job performance.

If managers are asked to list the problems they face, the problem of motivating employees is likely to be near the top. Employee motivation is a major concern of managers as well as scholars because motivation is closely related to the success of an individual, an organisation, and society. Through motivational efforts, people achieve their personal, or organizational, and societal goals. In an age of high labour costs and limited natural resources, the effective utilization of human resources is a key to solving many organizational and economic problems.

Yet motivating employees is becoming increasingly complex and difficult. As people become better educated and economically more independent, the traditional means of motivation ю formal authority and financial incentives become less effective. In addition, the ever increasing contraints placed on organizations further erode the power of manager to motivate employees. Within these contraints, however, managers still have the responsibility of motivating their employees toward the attaintment of organizational goals. To meet this responsibility, they should understand how and why people are motivated to work in organizations and be equipped with a set of principles that can be applied to employee motivation.

What Motivates People?

Why are some amployees better motiveted than others? Employee motivation is difficult to understand because it involves a variety of individual and organizational factors. The individual factors include needs, goals, attitudes, and abilities; the organizational factors include pay, job security, co-workers, supervision, praise and the job itself.

A number of theories have been developped to explain employee motivation in organizations. These theories can be divided into two main categories: (1) content and (2) process. Content theories include the needs theory and the reinfircement theory. The needs theory indicates that human behavior is energised by internal stimuli ю needs; the reinforcement theory explains how behavior can be controlled by its consequences ю reward and punishment.

While content theories are primarily concerned with the internal and external causes of behavior (needs and incentives), process theories attempt to explain the process by which people make motivational choices. The process theories are the perceptual theory, the expectancy theory, the equidity theory and the discrepancy theory.

The Motivational Process in Organizations

The motivational process in organizations can be described by a model that is composed of three parts: motivational inputs, motivational decisions and motivational outcomes.

The first part of the model identifies a set of motivational determinants. These key variables can be described as:

1. Employee needs. People have a set of needs they want to satisfy: (a) existence (biological and safety), (b) relatedness (affection, companionship, and influence), and (c ) growth (achievement and self-actualization). These internal stimuli energize behavior.

2. Organizational incentives. Organizations have a set of rewards that can satisfy employee needs. These include: (a) subatantive rewards (pay, job security, and physical working conditions), (b) interactive rewards (co-workers, supervision, praises and recognition), and (c ) intrinsic rewards (accomplishment, challenge, and responsibility). These organizational factors influence the direction of behavior.

3. Percaptual outcomes. People develop a set of perceptions regardng: (a) the value of organizational rewards, (b) the relationship between performance and rewards, and (c ) the likehood that their efforts may result in task performance.

The second part of the model explains the process by which people make motivational choices and decisions. This process describes the motivational efforts involved in deciding to perform effectively. The specific element involved is:

4. Motivational efforts. If they have the ability and authority, people make motivational decisions based on how they perceive the value of rewards, the instrumental relayionship between performance and rewards, and the likehood of task accomplishment. Generally, positive perceptions lead to high motivation.

The last part of the model explains the outcomes of employee motivation. It shows the relationships among motivation, performance, rewards, employee satisfaction and organizational productivity. These key variables can be discribed as:

5. Performance levels. Performance is a function of ability and motivation. Ability determines what a person can do, while motivation determines what a person will do. Employee job performance influences organizational productivity, which in turn affects the levels of organizational rewards.

6. Rewards. Performance may be either rewarded or not rewarded. Equitable rewards lead to employee satisfaction; inequitable rewards or no rewards lead to dissatisfaction.

7. Satisfaction. The ammount of satisfaction modifies the type and intensity of employee needs. This modified need structure influences the individual's future behavior.

This conceptual model identifies a number of factors influencing employee motivation, satisfaction, and performance.


Expectancy theory explains the process by which people make motivational choices. According to this theory, people make motivational choices based on how they perceive (1) the value of rewards, (2) the instrumental relationship between performance and rewards, and (3) the chance of getting the job done.

The expectancy theory starts with the assumption that people are rational beings who want to maximize their gains in their goal-directed endeavors. Therefore, when they are faced with a number of behavioral options leading to need satisfaction, they will evaluate the potential outcomes of these options and select one that promises an optimal result. In evaluating these behavioral options, a rational person will analyze (1) the value of the rewards that the organization offers (valence), (2) the relationship between performance and rewards (instrumentality), and (3) the perceived chance of accomplishing the required task (expectancy). The tendency to act (motivation) is said to be a function of the valence (V), the instrumentality (I) and the expectancy (E). Using the initials of these three variables, expectancy theory is often called the VIE theory. Now let's discuss each of these key elements.

Valence of Rewards

Valence is a subjective value attached to an incentive of reward. People attach a valence to an incentive because they believe it satisfies some of their needs. Since it is subjective, people differ in the value they attach to a given incentive. For example, one person may attach a high value to a promotion, while another person can avoid it. The former may like it because it brings money and power, while the latter dislikes it because it means more responsibility or the headaches of dealing with other people's problems.

Also since it is subjective, managers have little control over the valences their employees attach to organizational incentives. However, managers can influence the valence if incentives by matching rewards to employee needs. Valence usually increases when (1) an employee has strong needs, (2) the incentive matches one or more needs, and (3) the size of the incentive is large enough to satisfy the aroused needs. For example, an employee will probably attach a high valence to money if (1) he or she has a strong economic need, (2) money used as an incentive, and (3) the size of the monetary incentive is sufficiently attractive.

Performance-Reward Instrumentality

Instrumentality refers to the ralationship between performance and raward. People ask, "Will I be rewarded if I perform the job well?" If the answer is affirmative, they will be motivated to exert an effort and increase the level of task performance. If the

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