Theories of Motivation Overview of Maslow’s need hierarchy theory, Herzberg’s two-factor theory and Theory X and Y. Adam’s Equity theory; Vroom’s Expectancy theory; ERG theory; McClelland’s Need theory.

Theory X and Theory Y (Douglas McGregor)

Theory Y Theory X Work is Natural Self- Direction Seek Responsibility Good Decisions Widely Dispersed Avoid Work Must be Controlled Seek Security

ERG Theory (Clayton Alderfer) Concepts: More than one need can be operative at the same time. If a higher-level need cannot be fulfilled, the desire to satisfy a lower-level need increases. Core Needs Existence: provision of basic material requirements. Relatedness: desire for relationships. Growth: desire for personal development.

Expectancy Theory Vroom suggests that an employee's beliefs about Expectancy, Instrumentality, and Valence interact psychologically. In this way they create a motivational force, such that the employee will act in a way that brings pleasure and avoids pain. This force can be 'calculated' via a formula:   Expectancy Theory formula   Motivation = Valence x Expectancy x Instrumentality This formula can be used to indicate and predict things as: job satisfaction, occupational choice, the likelihood of staying in a job, and the effort that one might expend at work.

Expectancy, Instrumentality, & Valence Amity Business School Expectancy, Instrumentality, & Valence Effort Expectancy: Person’s perception that their effort will result in performance Instrumentality results in outcomes Valence: How desired are the outcomes from a job Performance Outcomes

Amity Business School High Motivation: According to the Expectancy Theory, high motivation results from high levels of Expectancy, Instrumentality, & Valence. If just one value is low, motivation will be low. This means that even if desired outcomes are closely link to performance, the worker must feel the task is possible to achieve for high motivation to result. Managers need to consider this relationship to build a high performance firm. The multiplier effect means that all must be high for high motivation, yet even one low factor can destroy motivation.

(Worker perceives that Amity Business School Expectancy Theory High Expectancy (Worker knows that if they try, they can perform) High Instrumentality (Worker perceives that high performance leads to outcomes) High Valence (Worker desires the outcomes resulting from high performance) High Motivation

MOTIVATION Thought Processes and Decisions Amity Business School MOTIVATION Thought Processes and Decisions Vroom’s Expectancy Theory

Adams' equity theory The Adams’ Equity Theory is named for John Stacey Adams, a workplace and behavioral psychologist, who developed this job motivation theory in 1963. Adams’ Equity Theory calls for a fair balance to be struck between an employee’s inputs (hard work, skill level, tolerance, enthusiasm, etc.) and an employee’s outputs (salary, benefits, intangibles such as recognition, etc.). According to the theory, finding this fair balance serves to ensure a strong and productive relationship with the employee, with the overall result being contented, motivated employees.

Motivation Equation Figure 12.1 Inputs from Organizational members Amity Business School Motivation Equation Figure 12.1 Inputs from Organizational members Performance Outcomes received by members Time Effort Education Experience Skills Knowledge Work Behav. Contribute to organization efficiency, effectiveness and attain goals Pay Job Security Benefits Vacation Autonomy Responsibility

Equity Theory Relationships PERCEIVED RATIO COMPARISON* EMPLOYEE’S ASSESSMENT Outcomes A Outcomes B Inputs A Inputs B Outcomes A Outcomes B Inputs A Inputs B < Inequity (under-rewarded) = Equity > Inequity (over-rewarded)

Amity Business School Inequity Inequity exists when worker’s outcome/input ratio is not equal to referent. Underpayment inequity: ratio is less than the referent. Worker feels they are not getting the outcomes they should given inputs. Overpayment inequity: ratio is higher than the referent. Worker feels they are getting more outcomes then they should given inputs. Restoring Equity: Inequity creates tension in workers to restore equity. In underpayment, workers reduce input levels to correct. Overpayment, worker can change the referent to adjust. If inequity persists, worker will often leave the firm.

Perceived Inequities May Lead To: Amity Business School Equity Theory This CTR relates to the material on pp. 278-280. Equity Theory Inputs Referents Equity Theory Outcomes Equity Theory Developed by J. Stacey Adams, Equity Theory states that an employee compares his or her job’s inputs-outcomes ratio to that of relevant others and then corrects any inequity. How employees choose to correct inequities has direct implications for managers. Key Concepts Inputs. This is the employee’s contribution to the organization. Outcomes. This is what the employee receives from the organization and includes mainly compensation, but also such factors as recognition & status. Referents. Referents consist of the source against which the individual compares themselves to in assessing equity. Categories of referents include: Other - or an individual with the same job in the organization. System - or the organizational pay policies and procedures that administer outcomes. Self - or the unique expectations the individual has regarding the size of the inputs-outcomes ratio that is considered equitable. This is based on experience, contacts, and past jobs and family commitments. When Employees perceive inequities between themselves and their referent, they may do one of the following: (1) Distort either their own or others’ inputs and outcomes; (2) behave in some way to induce others to change their inputs and outcomes; (3) behave in some way to change their own inputs and outcomes; (4) choose a different comparison referent; (5) quit their jobs. Inequitable Pay: Equity theory establishes four propositions relating to inequitable pay: (1) Overrewarded employees will produce more than equitably paid employees (2) Overrewarded employees will produce fewer but higher-quality units than equitably paid employees (3) Underrewarded employees will produce less or poorer quality output (4) Underrewarded employees will produce a large number of low-quality units in comparison with equitably paid employees. Perceived Inequities May Lead To: Distort Change Others Self New Referent Quit

McClelland’s Needs Theory Affiliation Achievement Power Amity Business School McClelland’s Needs Theory Affiliation Achievement Power David McClelland proposed the three-needs theory which asserts that there are three relevant motives or needs that motivate behaviour in the workplace: 1. The need for achievement (nAch) is the need to excel, to achieve in relation to a set of standards, to succeed. 2. The need for power (nPow) is the need to shape and control the behaviour of others. 3. The need for affiliation (nAff) is the desire for interpersonal relationships. He believed that these needs are acquired from the culture of a society. Some people have a compelling drive to succeed, but they strive for personal achievement, not for the rewards of success, per se (nAch). These high achievers seek situations in which they can take responsibility for solving problems, can receive rapid unambiguous feedback on performance, and can set moderately challenging goals. Persons with a high need for power (nPow) desire to be influential, in charge, and seek competitive, status-oriented situations. Those who have a high need for affiliation (nAff) want to be liked and accepted by others; so, they strive for friendships, cooperation, and high-trust situations. 9

Acquired Needs Theory Emphasizes importance of three needs acquired through experiences: Need for achievement (nAch) Need for power (nPower) Need for affiliation (nAff) McClelland encourages managers to identify the presence of these needs through observation and create appropriate work environments.

Acquired Needs Theory Needs are associated with work preferences High nAch: individual responsibilities, challenging goals, performance feedback. High nAff: interpersonal relationships, opportunities for communication. High nPower: attention, recognition, opportunity for influence over others. Senior executive success associated with high need for power and low need for affiliation.