1. Motivation and Rewards Management

2. Learning objectives
Explain the role of rewards in employee and volunteer motivation
Describe different types of intrinsic and extrinsic rewards
Describe the components of a financial compensation plan
Recognize job design as part of a rewards management system
Understand the importance of volunteer recognition

3. Rewards management
to attract, motivate and retain employees and volunteers
reward strategies should support an organisation’s goals and its human resource plan
selection and design of an effective rewards management system should consider human motivation theories

4. Theories of motivation
motivation is a psychological state that describes one’s drive to engage in a particular behaviour
Content theories and Process theories are used to understand motivation

5. Motivation The willingness to:
exert high levels of effort to reach organisational goals, conditioned by the effort’s ability to satisfy some individual need
Through the motivation process, people go from need - to motive - to behavior - to consequence and finally to either satisfaction or dissatisfaction.
Motivation
Motivation is defined as the willingness to exert high levels of effort to reach organisational goals, conditioned by the effort’s ability to satisfy some individual need.
Employee performance is a function of ability, resources and motivation. Ability is addressed in selection and training procedures. Motivation is developed through a complex interaction of job design, performance appraisal, pay and rewards, and the actions of superiors.
Effort is a measure of intensity. To be effective, effort must be channeled and focused to reach organisational and individual goals.

6. Content theories Attempt to explain what motivates individuals
The 3 classic theories are:
Maslow’s hierarchy of needs theory
Herzberg’s motivator-hygiene theory
McLelland’s three needs theory

7. The motivation process
Unsatisfied need
Tension
Motivation
Motivation is defined as the willingness to exert high levels of effort to reach organisational goals, conditioned by the effort’s ability to satisfy some individual need.
Employee performance is a function of ability and motivation. Ability is addressed in selection and training procedures. Motivation is developed through a complex interaction of job design, performance appraisal, pay and rewards, and the actions of superiors.
Effort is a measure of intensity. To be effective, effort must be channeled and focused to reach organisational and individual goals.
A need is defined as an internal state that makes certain outcomes appear attractive.
Unsatisfied needs create tension that stimulates drives within the individual. Drives, in turn generate a search behaviour to find particular goals, that will satisfy the need and reduce the tension.
Discussion note: The key turn on motivation is the contingency that goals will satisfy the needs if obtained. Discuss the contingent nature of need satisfaction and how it can be utilised by management to the benefit of both the individual and the organisation.
Drives
Search behaviour
Satisfied need
Reduction of tension

8. Maslow’s hierarchy of needs
Based on 5 progressive levels of needs that every human experiences:
Physiological needs (e.g., food, shelter, clothing)
Safety needs (e.g., security, stability, health)
Belongingness needs (e.g., affection, acceptance, friendship)
Esteem needs (e.g., self-esteem, confidence, respect by others)
Self-actualization (e.g., personal growth, morality)

9. Maslow’s hierarchy of needs
Self-actualisation
Needs hierarchy theory
The best known theory of motivation was offered by Abraham Maslow. His hierarchy of needs theory posits that there are five human needs, hierarchically ordered, so that lower level needs take precedence in motivating individuals until satisfied. When a lower level need is satisfied, the next higher level need becomes dominant in the individual.
Five needs
1. Physiological needs These are the basic food, drink, shelter, and sexual needs felt by all humans.
2. Safety needs This refers to a person’s needs for security and protection from physical and emotional harm.
3. Social needs These are the affection, belongingness, acceptance, and friendship needs felt by people.
4. Esteem needs These are internal factors such as self-respect, autonomy, achievement, and external factors such as status, recognition, and attention.
5. Self-actualisation needs This refers to what some would call emotional and spiritual growth, achieving one’s potential, self-fulfillment or the drive to become all that one is capable of becoming.
For Maslow, physiological and safety needs are lower level needs that are met primarily externally. Higher level needs of social, esteem, and self-actualisation are met primarily in how the individual feels internally about the quality of their interaction with others. Lower level needs are more objectively verified (i.e. hunger, thirst). Higher level needs are more individually subjective in nature.
Esteem
Social
Safety
Physiological

10. Herzberg’s motivator-hygiene theory
aspects of the job itself (work content) related to satisfaction; eg, achievement, recognition – ‘motivators’
aspects of the workplace (work context) related to dissatisfaction; eg, policies, relationship with supervisor – ‘hygienes’
Improvement of hygiene factors is needed to avoid employee dissatisfaction
to increase motivation opportunities for employee achievement, recognition, and growth (motivators) must be addressed

11. Herzberg’s motivation-hygiene theory
Motivation factors
Achievement
Recognition
Work itself
Responsibility
Advancement
Growth
Maintenance (hygiene)
factors do NOT motivate
Supervision
Company policy
Supervisor relations
Working conditions
Salary
Peer relations
Personal life
Subordinate relations
Status
Security
Herzberg’s motivation-hygiene theory
Psychologists Fredrick Herzberg has forwarded the idea that satisfaction and dissatisfaction are different concepts as opposed to the traditional view that the are opposite endpoints on the same continuum. Based upon extensive interviews with workers, Herzberg developed a two-factor theory of motivation. One factor, motivators, deals with satisfaction. The other factor, hygiene, deals with dissatisfaction.
Motivators Motivators are factors that increase job satisfaction. Herzberg found that satisfied employees did not talk about the same things dissatisfied employees did. Employees were satisfied by intrinsic factors such as achievement, recognition, and responsibility. The opposite of satisfaction is no satisfaction, not dissatisfaction.
Hygiene factors Hygiene factors are things that eliminate dissatisfaction. When these factors are adequate, people will not be dissatisfied. Hygiene factors are extrinsic factors such as company policy and general working conditions.
Criticisms of Herzberg
Many critics have faulted Herzberg’s methodology and data collection as well as his interpretation. Attribution theory predicts that people take personal credit for things they like (intrinsic motivators) and blame others for things they don’t like (extrinsic hygiene factors). This tendency would be inseparable in the self-reports of those interviewed and forms a systemic bias. Further, no general measure of satisfaction was used. Thus the inductive nature of Herzberg’s theory may be flawed in that each case is essentially its own data set.
Discussion note: Herzberg’s theories remain popular with managers. Note that the valid criticisms are essentially those of method – you can be wrong in procedure and still hit on something valuable to managers.
Extremely satisfied
Neutral
Extremely dissatisfied

12. McLelland’s 3 need theory
Need for achievement –to accomplish moderately challenging performance goals, be successful in competitive situations, assume personal responsibility for work (rather than delegating it to others)
Need for power –to control one’s environment, including people and material resources.
Need for affiliation –to seek approval from others, conform to their wishes and expectations, and avoid conflict/confrontation
individuals have some need for achievement, power and affiliation, however, one of these needs will be predominant

13. The Three Needs Theory Affiliation (nAff) Achievement (nAch) Power
McClelland's 3 needs theory
The Three
Needs Theory
Affiliation
(nAff)
Achievement
(nAch)
Power
(nPow)
Three-needs theory
Three-needs theory posits that the needs for achievement, power, and affiliation are the major motives in work.
Need for achievement (nAch) The need for achievement is the drive to excel, to achieve in relation to a set of standards, to strive to succeed. High achievers are distinguished by a need for personal responsibility, rapid and unambiguous feedback, and the ability to set moderately challenging goals.
Need for power (nPow) The need for power refers to the need to make others behave in a way that they would not have behaved otherwise. It is the need to have an impact and to be influential.
Need for affiliation (nAff) The need for affiliation is the desire for friendly and close interpersonal relationships.

14. Process theories
explain how individuals are motivated; that is, the cognitive process that individuals go through that explain how a felt need can result in certain behaviour
Two classic process theories are equity theory and expectancy theory

15. Equity theory
extends the content theories of motivation by proposing that individuals will be motivated, not just by a given reward, but by whether they perceive the reward situation to be equitable and fair
individuals will evaluate a given reward according to whether they feel it is proportionate with their own efforts & whether it is equitable to the efforts and rewards of others

16. Classic model of equity
‘people will evaluate the fairness of their situation in an organisation based on a comparison of the ratio of their own inputs and outcomes with some referent’s ratio of inputs and outcomes’ (Mitchell & Daniels, 2003, p. 242)
When the ratios are unequal individuals are motivated to rectify the perceived inequity by (a) modifying their own input (effort) to outcome (rewards) ratio, (b) changing their referent other and focusing instead on another person’s ratio of inputs and outcomes, (c) distorting their perceptions, or (d) quitting

17. Expectancy theory
describes the cognitive process individuals go through when determining whether to exert effort
assumes that individuals are rational beings who think about possible outcomes before they engage in behaviour
motivation to exert effort is a function of an individual’s perception that, engagement in a particular behaviour (e.g., performs tasks well) will be acceptable and rewarded – and the reward is valued

18. Types of rewards
Intrinsic rewards - received directly as a result of performing his or her job
presume that there can be value in the task itself
Extrinsic rewards - financial (salary or wages, incentives or bonuses) or nonfinancial (pension contributions, life insurance)

19. Case – Will she stay or go?
It will depend on which of the three needs are most dominant.
Her needs for power and affiliation are well satisfied where she is. Her need for achievement might well be better satisfied out of the organisation.

20. Financial compensation plan
objectives should be clearly stated & consistent with its corporate strategy and human resource plan.
What does the sport organization want to pay for? What does it want to reward?
the objectives form the basis upon which pay and incentives will be awarded

21. Pay structure
Three principles guide the establishment of a pay structure:
internal equity
the external market
employee contribution

22. Internal equity (a) comparable pay for comparable content of work
(b) comparable skills that are required
(c) comparable contribution of the work or skills to the objectives of an organisation

23. External market principle
refers to positioning an organisation’s pay structure, relative to what competitors are paying
needs to be considered in setting a competitive (and equitable) compensation package in order to attract and retain competent staff

24. Employee contribution
Refers to the relative emphasis in a pay structure on compensation by
job level
skills
seniority
performance
or some combination.

25. Sport marketing agencies
Factors
Major league teams
Major league offices
College/
University
athletics
Sport marketing agencies
Minor league teams
Arenas/sport venues
Broadcast/
media
Average compensation ($US)
$79,560
$77,500
$44,930
$103,077
$50,698
$63,684
$118,269
Range of compensation
$25, ,000
$25, ,500
$25,000-
85,000
350,000
$25, ,500
$27, ,500
$27, ,000
% compensation based on bonus/commission
12.3%
13.9%
2.5%
19.7%
18.0%
4.7%
23.5%
Bonuses based on
dept. performance
45.7%
37.2%
58.3%
18.5%
8.6%
37.8%
35.6%
company performance
24.0%
20.6%
16.7%
47.2%
61.4%
23.3%
30.6%
Bonuses based on individual performance
28.6%
42.2%
25.0%
34.3%
30.0%
38.9%
33.8%
Entertainment expense account
54%
41%
28%
58%
32%
53%
77%
Pension
56%
59%
75%
33%
11%
68%
Company car/auto reimbursement
42%
61%
35%
37%
25%
Tuition reimbursement
13% 5%
64% 6% 3%
Country club membership
10% 0% 4%
12%
Data is based on a survey of 421 sport marketing professionals employed in seven segments of the sport industry in the United States.
Respondents were predominantly male (81.6%), average age 35.5 years, holding an undergraduate degree (94%),
with an average of 8.8 years of experience in the sport industry, and a 57-hour average work week.

26. Job design
the opportunity to fulfill individual needs can be built into the design of a job
typical motivating elements of a job are: autonomy, intrinsic job feedback, extrinsic job feedback, social interaction, task variety, task identity, skill/knowledge requirements, task significance, growth/learning, and recognition

27. Volunteer recognition & rewards
(a) normative incentives - motivated by the opportunity to help a cause such as a sport program which he or she may feel is important
(b) affective incentives - motivated by the opportunity to work with others, develop friendships, and identify with a group
(c) utilitarian incentives - motivated by the opportunity to use skills or sport background to develop new skills and work experience or to network in the community
the importance of these incentives varies by sport volunteers’ age

28. Nonfinancial extrinsic rewards
can be an important symbolic expression of appreciation for contributions and performance
provide some kind of alternative recognition that is tangible and extrinsic to the act of volunteering itself eg letter or thanks, award for service, complimentary tickets to special events and functions etc.

29. Summary
Content theories (e.g., Maslow’s Hierarchy of Needs Theory, Herzberg’s Motivator-Hygiene Theory, McClelland’s Three-Need Theory) explain what motivates employees and volunteers, while process theories (e.g., equity theory, expectancy theory) explain how they are motivated.
Job design can be used to increase the motivating potential of a job by increasing task variety, task identity, task significance, autonomy, and direct feedback, all of which provide an employee or volunteer with an increased sense of the meaningfulness of their job, responsibility for the outcomes of their work, and knowledge of results of their contributions.
Volunteers by definition do not receive extrinsic (direct) financial compensation, therefore the sport organisation must rely on the intrinsic rewards of the volunteer role itself to ensure their needs are met.