Everything you need to know about the types of motivational theories. Management tries to utilise all the sources of production in a best possible manner.

The efforts of management will not bear fruit if the employees are not encouraged to work more.

The motivated employees become an asset to the organisation. Researchers and theorists are working towards investigating to explore reasons and rationales behind motivation and how it pushes employees to work.

Moreover, the relationship between motivation and other psychological variables including job performance and job satisfaction have turned out to be important issues of scholastic investigations.


Motivational theories can be studied under the following heads:- 1. Theories of Motivation Regarding Behaviour 2. Theories of Motivation Regarding Work.

Theories of motivation regarding behaviour can be further sub-divided into content theories and process theories. Some of the content theories are:- i. Maslow’s Model ii. ERG Theory iii. McClelland’s Theory of Needs iv. Herzberg’s Two-Factor Theory.

Theories of motivation regarding work can be further sub-divided into:- i. Vroom’s Expectancy Model ii. Equity Theory iii. Goal-Setting Theory iv. Management by Objectives (MBO).

Additionally, few other motivational theories are:- 1. Maslow’s Need Hierarchy Theory 2. McClelland’s Need Theory 3. Theory X and Theory Y 4. Motivation-Hygiene Theory 5. Equity Theory 6. Expectancy Theory.

Types of Motivational Theories

Types of Motivational Theories – Maslow’s Need Hierarchy Theory, McClelland’s Need Theory, Theory X and Theory Y, Motivation-Hygiene Theory and a Few Others

Robbins (1993) defined motivation as the “willingness to exert high levels of effort towards organizational goals, conditioned by the effort’s ability to satisfy some individual need.”

Type # 1. Maslow’s Need Hierarchy Theory:


Abraham Maslow (1908-1970) was an American psychologist. He is noted for his conceptualization of a five-tiered hierarchy of human needs and is considered the father of humanistic psychology. Needs are defined as internal states which make certain outcomes appear attractive. According to Maslow, the genesis of motivation takes place through needs. Motivation was defined as the willingness to exert high levels of effort to achieve certain goals. Maslow saw human beings’ needs arranged like a ladder (Figure 4.2).

The most basic needs, at the bottom, were physical (Biological and Physiological)—air, water, food, sleep, etc. Then came safety needs—security, stability, etc. —followed by psychological or social needs—belonging, love, and acceptance. The penultimate step in the ladder is made by the esteem needs- achievement, reputation, status, and responsibility.


At the top of it all are the self-actualizing needs—the need to fulfill oneself, to become all that one is capable of becoming. The self-actualizing needs comprise of personal growth and fulfillment, creativity, problem-solving, morality, ethics, and lack of prejudice.

Maslow felt that unfulfilled needs lower on the ladder would inhibit the person from climbing to the next step. Someone dying of thirst quickly forgets their thirst when they have no oxygen, as he pointed out. Therefore, Maslow recommended that lower level physiological needs should be fulfilled for individuals to get motivated for self-actualization.

As shown in Figure 4.2, organizations can pragmatically use Maslow’s hier­archy of needs pyramid to motivate their employees and ultimately reach the highest level of self-actualization. For example, the biological need of food and water can be fulfilled by installing tea, coffee, snacks, and soft-drinks vending machines in the office premises (which many contemporary organizations are doing now).

Similarly, appropriate working hours would allow the employees to devote ample time with family and in resting. In the same way, more such ways of motivating the employees are suggested in Figure 4.2.

Type # 2. McClelland’s Need Theory:

David McClelland (1917-1998) was an American psychological theorist, who argued that all types of needs may not be uniformly applicable to all individuals (as suggested by Maslow), as some needs are acquired through interaction with the environment, i.e. are learned or socially acquired. These are the need for achievement, need for power, and need for affiliation.

The need for achievement was defined as the drive to excel, to achieve in rela­tion to a set of standards, to strive to succeed. The need for power was defined as the need to make others behave in a way that they would not have behaved otherwise. The need for affiliation was defined as the desire for friendly and close interpersonal relationships. Because effective managers must positively influence others, McClelland pro­poses that top managers should have -a high need for power coupled with a low need for affiliation.

Type # 3. Theory X and Theory Y:

Douglas McGregor (1906-1964) was a professor at the MIT Sloan School of Management, who believed that managers use either of the two theories, namely Theory X and Theory Y, to motivate their employees.

Theory X has a negative connotation in the sense that it is based upon the traditional approach of direction and control whereby managers place orders on their subordinates and place control mechanisms to keep an eye on the progress made by them. Thus, according to this theory, employees get motivated to work due to coercion, fear factor and force. On the contrary, Theory Y is based upon the modern behavioural approach which treats the employees as capable, responsible, and mature.

McGregor argued that most organizations at that time were fulfilling the basic needs of employees and therefore, the workplace needs to be re-organized in order to provide an environment for achieving higher-level social, esteem, and self-actualization needs. This way, the work would be more enjoyable for the employees who would willingly commit themselves to sharing more responsibility for the achievement of organizational goals.

Type # 4. Motivation-Hygiene Theory:


Frederick Herzberg (1923-2000) was a noted American psychologist, who proposed the Two-Factor Theory (also known as Motivation-Hygiene Theory). He found that job satisfaction and job dissatisfaction acted independently of each other. Two-Factor Theory states that there are certain factors in the workplace that cause job satisfaction, while a separate set of factors cause dissatisfaction.

It distinguishes between: motivators (e.g. challenging work, recognition, responsibility) which give positive satisfaction, arising from intrinsic conditions of the job itself, such as recognition, achievement, or personal growth; and hygiene factors (e.g. status, job security, salary, and fringe benefits) which do not give positive satisfaction, although dissatisfaction results from their absence.

Essentially, hygiene factors are needed to ensure an employee is not dissatisfied, and motivation factors are needed in order to motivate an employee to higher performance.

Type # 5. Equity Theory:

Equity theory of motivation was developed by John Stacey Adams in 1962. According to Adams, employees make comparisons of their job inputs and outcomes relative to others, and inequities influence the degree of effort which employees exert. Equity refers to the perception by workers that they are being treated fairly.


Employee perceptions have a major impact on performance. External equity exists when employees performing jobs within a firm are paid at a level comparable with those paid for similar jobs in other firms. Internal equity exists when employees are paid according to the relative value of their jobs within their organization.

Type # 6. Expectancy Theory:

Expectancy theory was developed by Victor Vroom, who proposed that an indi­vidual is motivated to perform a task on the basis of three linkages signified by the three questions below –

i. How hard do I have to work to achieve a certain level of performance and can I actually achieve that level? (Effort-performance linkage)

ii. What reward will performing at that level get me? (Performance-reward linkage)


iii. How attractive is this reward to me and does it help achieve my goals? (Attractiveness)

Types of Motivational Theories – Theories of Motivation Regarding Behaviour and Work

Theories of Motivation Regarding Behaviour:

There are basically two types of theories developed that relate to and define the motivational processes. These are the “content theories” which attempt to determine and specify drives and needs that motivate people to work and “process theories” which attempt to identify the variables that go into motivation and their relationship with each other.

These theories are described in greater detail:

The Content Theories of Work Motivation:

The content theories have been developed to explain the nature of motivation in terms of types of need that people experience. They attempt to focus on factors within a person that initiate and direct a certain type of behaviour or check certain other type of behaviour. The basic idea underlying such theories is that people have certain fundamental needs, both physiological and psychological in nature, and that they are motivated to engage in activities that would satisfy these needs. Thus, the nature of needs establishes the nature of motivation that results in a specific behaviour aimed at reaching the goal of satisfying such needs.

Some of the more important content theories are:


1. Maslow’s Model:

Maslow’s “needs hierarchy theory” is probably the most widely used theory of motivation in organizations. Abraham Maslow suggested that people have a complex set of exceptionally strong needs and the behaviour of individuals at a particular moment is usually determined by their strongest need. He developed his model of human motivation in 1943, based upon his own clinical experience and formulated his theory of hierarchical needs by asking the same question, what is it that makes people behave the way they do and made a list of answers from which he developed a pattern. His theory is based upon two assumptions.

First those human beings have many needs those are different in nature ranging from the biological needs at the lower level, which is the level of survival, to psychological needs at the upper extreme, which is the level of growth. Second that these needs occur in an order of hierarchy so that lower level needs must be satisfied before higher level needs arise or become motivators. Mahatma Gandhi, the Indian leader, once remarked, Even God cannot talk to a hungry man except in terms of food.

Similarly, there is a quotation from the Holy Guru Granth Sahib, the holy scripture of Sikhs in India when a holy man says to God, “Take your rosary beads away. I cannot worship and meditate on you when I am hungry.” This means that if the people’s basic needs which are biological in nature are unsatisfied, then their total attention will be focused upon these needs and it will not be possible to communicate with them about other matter.

This model of hierarchical needs explains human behaviour in a more dynamic and realistic manner and is primarily based upon people’s inner states as a basis for motivation and the environmental conditions do not play any significant role. Maslow postulates five basic needs arranged in successive layers. These needs continue to change resulting in a change in goals and activities.

These five needs are arranged in the form as shown. The first three level needs at the bottom are known as “deficiency” needs, because they must be satisfied in order to ensure the individual’s very existence and security and make him fundamentally comfortable. The top two sets of needs are termed “growth” needs because they are concerned with personal growth, development and realization of one’s potential.


These needs are explained in detail as follows:

(a) Physiological Needs:

The physiological needs form the foundation of the hierarchy and tend to have the highest strength in terms of motivation. These are primarily the needs arising out of physiological or biological tension and they are there to sustain life itself and include the basic needs for food, water, shelter and sex.

Sexual need and desire is not to be confused with love, which is at the third level. Once these basic needs are satisfied to the degree needed for the sufficient and comfortable operation of the body, then the other levels of needs become important and start acting as motivators.

(b) Security and Safety Needs:

Once the physiological needs are gratified, the safety and security needs become predominant. These are the needs for self-preservation as against physiological needs, which are for survival. These needs include those of security, stability, freedom from anxiety and a structured and ordered environment.


These safety and security needs are really provisions against deprivation of satisfaction of physiological needs in the future. It also involves a sense of protection against threats and danger of losing the job in the future. In a civilized society such as ours, a person is usually protected from threats of violence or extremes in climate or fear of material safety, so that the safety and security needs dwell upon economic and job security, life and medical insurance and other protective measures to safeguard the satisfaction of physiological needs in the future which may be unpredictable.

(c) Love and Social Needs:

After the needs of the body and security are satisfied, then a sense of belonging and acceptance becomes prominent in motivating behaviour. These needs include the needs for love, friendship, affection, and social interaction. We look for an environment where we are understood, respected and wanted. That is one reason for “polarization” where people of similar background and beliefs tend to group together. “Love thy neighbour” has perhaps a profound meaning.

(d) Esteem Needs:

This need for esteem is to attain recognition from others, which would induce a feeling of self-worth and self-confidence in the Individual. It is an urge for achievement, prestige, status and power. Self-respect is the internal recognition. The respect from others is the external recognition and an appreciation of one’s individuality as well as his contribution. This would result in self-confidence, independence, status, reputation and prestige. People then would begin to feel that they are useful and have some positive effect on their surrounding environment.

(e) Self-Actualization Needs:


This last need is the need to develop fully and to realize one’s capacities and potentialities to the fullest extent possible, whatever these capacities and potentialities maybe. This is the highest level of need in Maslow’s hierarchy and is activated as a motivator when all other needs have been reasonably fulfilled.

At this level, the person seeks challenging work assignments that allow for creativity and opportunities for personal growth and advancement. This need is for soul searching and is inner-oriented. A self- actualized person is creative, independent, content, and spontaneous and has a good perception of reality and he is constantly striving to realize his fun potential. Thus, “what a man ‘can’ be ‘must’ be.”

Maslow’s model is a general model in which an individual’s needs interact with each other to some degree. Needs are not necessarily linear, nor is their order so rigid. The relative dominance of many needs is variable and is continuously shifting. For example, a self-actualized person may shift his priority to social needs and love needs, instead of prestige and status, if suddenly there occurs a vacuum due to loss of a loved one.

Similarly, a person may not go to the higher need, even when his lower needs are satisfied. It is also likely that a well-prepared elite person may decide to enter a commune, where there is overwhelming emphasis on love and affection, rather than climb the corporate ladder.

Maslow’s theory made management aware that people are motivated by a wide variety of needs, and that it must provide an opportunity for the employees to satisfy these needs through creating a physical and conceptual work environment, so that people will be motivated to do their best to achieve organizational goals.

The first level needs in the hierarchy, the physiological needs can be satisfied through such organizational efforts and incentives, as adequate wages and salary, acceptable working conditions in order to improve comfort and avoid fatigue, more leisure time and acceptable work environment in terms of lighting, ventilation, restrooms, working space, heat and noise level. Some bonuses and other fringe benefits will be highly motivational.

The second level needs of safety and security can be satisfied through management’s initiative to provide life insurance, medical insurance, job security, cost of living increments, pension plans, freedom to unionize, and employee protection against automation. Law in the form of minimum wages, unemployment benefits, and welfare benefits provides the economic security to some degree. Similarly, unions protect employees against discrimination and indiscriminate firing.

Since first level physiological needs and second level security needs are primarily met by business, industrial, societal and legal environment, the management must take steps to satisfy higher level needs, and must establish as to which of these needs are the stronger sources of motivation. When the third level needs of love and affiliation become motivators, then people find an opportunity in their work environment for establishing friendly interpersonal relationships.

The management can satisfy these needs by:

i. Providing opportunities for employees to interact society with each other through coffee breaks, lunch facilities and recreational activities such as organized sports programmes, company picnics and other social get-together.

ii. Creating team spirit by keeping work groups informal wherever possible with friendly and supportive supervision.

iii. Conducting periodic meetings with all subordinates to discuss matters pertaining to personal achievements and contributions as well as organizational developments.

The fourth level needs of self-esteem involve a feeling of satisfaction and achievement and recognition for such achievement.

The management can take the following steps to satisfy these needs:

i. Design more challenging tasks and provide positive feedback on performance of employees.

ii. Give recognition and encouragement for performance and contribution and delegate additional authority to subordinates.

iii. Involve subordinates in goal setting and decision-making processes.

iv. Provide adequate training and executive development programmes to help employees successfully accomplish their goals and increase their competency on their jobs.

v. Provide some of the symbols for status and respect, such as executive level job title, private secretary, privileged parking, promotion, company car, stock options and write-ups about achievements in the company newspapers.

The fifth and top-level needs of self-actualization long for growth arid creativity and the management can take the following steps to satisfy these needs:

i. The employees should be given an opportunity to shape their own jobs.

ii. Give employees the freedom of expression. This will open the channels of communications further and give the employees an opportunity to get involved.

iii. Encourage and develop creativity among employees. Creativity is tied in with freedom of expression and freedom of movement.

Maslow believed that from the point of organizational behaviour the management should strive to create an organizational climate, which motivates employees at all levels of organizational hierarchy. Research has established that top managers generally are more able to satisfy their higher level needs than lower level managers who have more routine jobs. Blue-collar workers who have very little freedom over job operations may not even experience the higher level needs.

2. ERG Theory:

The ERG need theory, developed by Clayton Alerter is a refinement of Maslow’s needs hierarchy. Instead of Maslow’s five needs, ERG theory condenses these five needs into three needs. These three needs are those of Existence, Relatedness and Growth. The E, R and G is the initials for these needs.

(i) Existence Needs:

These needs are roughly comparable to the physiological and safety needs of Maslow’s model and are satisfied primarily by material incentives. They include all physiological needs of Maslow’s model and such safety needs which financial and physical conditions rather than interpersonal relations satisfy. These include the needs for sustenance, shelter and physical and psychological safety from threats to people’s existence and well-being.

(ii) Relatedness Needs:

Relatedness needs roughly correspond to social and esteem needs in Maslow’s hierarchy. These needs are satisfied by personal relationships and social interaction with others. It involves open communication and honest exchange of thoughts and feelings with other organizational members.

(iii) Growth Needs:

These are the needs to develop and grow and reach the full potential that a person is capable of reaching. They are similar to Maslow’s self-actualization needs. These needs are fulfilled by strong personal involvement in the organizational environment and by accepting new opportunities and challenges.

ERG theory differs from Maslow’s theory in proposing that people may be motivated by more than one kind of need at the same time. While Maslow proposes that in hierarchy of needs, a person will satisfy the lower level needs before he moves up to the next level of needs and will stay at that, need until it is satisfied, ERG theory suggests that if a person is frustrated in satisfying his needs at a given level, he will move back to lower level needs.

For example, assume that a manager’s existence needs are fully satisfied and he looks for more challenging tasks to satisfy his self-esteem needs. If his efforts are frustrated in meeting these challenges, he will move back to existence needs and may ask for more material benefits.

3. McClelland’s Theory of Needs:

Since the lower level needs in Maslow’s model are generally satisfied by the business, societal and legal systems, they are no longer strong motivators. Studies conducted by Harvard psychologist David McClelland concluded that from the organizational behaviour point of view the most prominent need is the need for achievement, power and affiliation. The primary motive is the “achievement motive” and is defined as a desire to succeed in competitive situations based upon an established or perceived standard of excellence.

Individuals with a strong “need for achievement” (known as n Ach), ask for, accept and perform, well in challenging tasks which require creativity, ingenuity and hard work. They are constantly preoccupied with a desire for improvement and look for situations in which successful outcomes are directly correlated with their efforts so that they can claim credit for success.

They take moderate and calculated risks and prefer to get quick and precise feedback on their performance. They set more difficult but achievable goals. For themselves, because; success with easily achievable goals hardly provides a sense of achievement. They desire greater pleasure and excitement from solving a complex problem than from financial incentives or simple praise.

The “need for power” (n Paw) is the desire to affect and control the behaviour of other people and to manipulate the surroundings. Power motivation when applied positively results in successful managers and leaders who prefer democratic style of leadership. Power motivation, applied negatively tends to create arrogant autocratic leadership.

The “need for affiliation” (n Aff) is related to social needs and reflects a desire for friendly and warm relationships with others. Individuals tend to seek affiliation with others who have similar beliefs, backgrounds and outlook on life. This results in information of informal groups and informal organizations. It is evident in social circles also that people mix with people of their own kind.

Individuals with high “n Aff’ tend to get involved in jobs that require a high amount of interpersonal contact; and relations such as jobs in teaching and public relations. From organizational behaviour point of view, these individuals are highly motivated to perform better in situations where personal support and approval are tied to performance. They tend to avoid conflict and exhibit strong conformity to the wishes of their friends.

4. Herzberg’s Two-Factor Theory:

Fredrick Herzberg and his associates developed the two-factor theory in the late 1950s and early 1960s. As part of a study of job satisfaction, Herzberg and his colleagues conducted in-depth interviews with over 200 engineers and accountants in the Pittsburgh area. The researchers felt that a person’s relation to his work is a basic one and that his attitude towards work would determine his organization related behaviour.

The respondents were required to describe in detail the type of environment in which they felt exceptionally good about their jobs and the type of environment in which they felt bad about their jobs. It seems natural to believe that people who are generally satisfied with their job will be more dedicated to their work and perform it well as compared to those people who are dissatisfied with their jobs. If the logic seems justified then it would be useful to isolate those factors and conditions that produce satisfaction with the job and those factors, which produce dissatisfaction.

The basic questions that were asked in the survey were the following two:

i. What is it about your job that you like? and

ii. What is it about your job that you dislike?

Based upon these answers it was concluded that there are certain characteristics or factors that tend to be consistently related to job satisfaction and there are other factors that are consistently related to job dissatisfaction. Herzberg named the factors that are related to job satisfaction as motivational factors, which are intrinsic in nature and factors related to job dissatisfaction as maintenance or hygiene factors which are extrinsic in nature.

These factors are described in detail as follows:

(i) Hygiene Factors:

Hygiene factors do not motivate people. They simply prevent dissatisfaction and maintain status quo. They produce no growth but prevent loss. The absence of these factors leads to job dissatisfaction. The elimination of dissatisfaction does not mean satisfaction and these factors simply maintain a “zero level of motivation.” For example, if a person indicated “low pay” as a cause of dissatisfaction, it would not necessarily identify ‘high pay’ as a cause of satisfaction.

Some of the hygiene factors are:

i. Wages, salary and other types of employee benefits.

ii. Company policies and administration rules that govern the working environment.

iii. Interpersonal relations with peers, supervisors and subordinates. Cordial relations with all will prevent frustration and dissatisfaction.

iv. Working conditions and job security. The job security may be in the form of tenure or a strong union could support it.

v. Supervisor’s technical competence as well as the quality of his supervision. If the supervisor is knowledgeable about the work and is patient with his subordinates and explains and guides them well, the subordinates would not be dissatisfied in this respect.

All the hygiene factors are designed to avoid damage to efficiency or morale and these are not expected to stimulate positive growth. Hawthorne experiments were highly conclusive in suggesting that improvements in working conditions or increments in financial benefits do not contribute to motivated performance.

A new plant or upgraded facilities at a plant seldom motivate workers if the workers do not enjoy their work and these physical facilities are no substitute for employee feelings of recognition and achievement.

(ii) Motivational Factors:

These factors are related to the nature of work (job content) and are intrinsic to the job itself. These factors have a positive influence on morale, satisfaction, efficiency and higher productivity.

Some of these factors are:

(a) The Job Itself:

To be motivated, people must like and enjoy their jobs. They become highly committed to goal achievement and do not mind working late hours in order to do what is to be done. Their morale is high as evidenced by lack of absenteeism and tardiness.

(b) Recognition:

Proper recognition of an employee’s contribution by the management is highly morale boosting. It gives the workers a feeling of worth and self-esteem. It is human nature to be happy when appreciated. Thus, such recognition is highly motivational.

(c) Achievement:

A goal achievement gives a great feeling of accomplishment. The goal must be challenging, requiring initiative and creativity. An assembly line worker finishing his routine work hardly gets the feeling of achievement. The opportunities must exist for the meaningful achievement; otherwise workers become sensitized to the environment and begin to find faults with it.

(d) Responsibility:

It is an obligation on the part of the employee to carry out the assigned duties satisfactorily. The higher the level of these duties, the more responsible the work would feel and more motivated he would be. It is a good feeling to know that you are considered a person of integrity and intelligence to be given a higher responsibility. It is a motivational factor that helps growth.

(e) Growth and Advancement:

These factors are all interrelated and are positively related to motivation. Job promotions, higher responsibility, participation in central decision-making and executive benefits are all signs of growth and advancement and add to dedication and commitment of employees. The Herzberg’s two-factor model is tied in with Maslow’s basic model in that Maslow is helpful in identifying needs and Herzberg provides us with directions and incentives that tend to satisfy these needs.

Also the hygiene factors in Herzberg’s model satisfy the first three levels of Maslow’s model of physiological needs, security and safety needs and social needs and the motivational factors satisfy the last two higher level needs of esteem and self-actualization.

Some researchers do not agree with Herzberg’s model as being conclusive, since the results were based primarily on the responses of white-collar workers (accountants and engineers) and do not necessarily reflect the ‘blue collar workers’ opinion who may consider hygiene factors as motivational factors.

Some studies have found that the effect of hygiene factors and motivational factors are totally reversed on some people. They are highly motivated by financial rewards, organized supervision, well-defined work rules, pleasant working environment and positive employee interaction and do not give much importance to achievement and self- actualization.

Another criticism about Herzberg’s two-factor theory dwells upon the method of research and data collection. The theory was developed on the basis of “critical incident” method. According to this method, the respondents were asked to indicate particular incidents, which they felt, were associated with their satisfaction or dissatisfaction with their jobs. This means that the theory is “method bound” and studies that use other methods for measuring satisfaction and dissatisfaction fail to support the validity of Herzberg’s theory.

Furthermore, the theory does not take into consideration individual differences in values and outlook as well as the individual’s age and organizational level.

However, this theory has contributed to one management programme that has lent itself to the enhancement of motivators. Ii provides valuable guidelines for structuring the jobs in order to include within the job content such factors, which bring about satisfaction.

Theories of Motivation Regarding Work:

While “need theories” of motivation concentrate upon “what” motivates persons, “process theories” concentrate upon “how” motivation occurs. These theories identify the variables that go into motivation and their relationship with each other.

Some of these theories are explained in more detail as follows:

1. Vroom’s Expectancy Model:

The expectancy model is based upon the belief that motivation is determined by the nature of the reward people expect to get as a result of their job performance. The underlying assumption is that a man is a rational being and will try to maximize his perceived value of such rewards.

He will choose an alternative that would give him the most benefit. People are highly motivated if they believe that a certain type of behaviour will lead to a certain type of outcome and their extent of personal preference for that type of outcome. There are three important elements in the model.

These are:

i. Expectancy:

This is a person’s perception of the likelihood that a particular outcome will result from a particular behaviour or action. This likelihood is probabilistic in nature and describes the relationship between an act and its outcome. For example, if a student works hard during the semester, he will expect to do well in the final examination. It is not 100% definite that he will indeed do well in the examination.

There is some probability attached to this outcome. Similarly, if a person works hard, he may expect to perform better and increase productivity. For example, a worker works hard and is absolutely certain (expectancy = 1.0) that he can produce an average 15 units a day and 60% certain (expectancy = 0.6) that he can produce a high of 20 units per day. This expectation of outcome is known as “first level” outcome.

ii. Instrumentality:

This factor relates to a person’s belief and expectation that his performance will lead to a particular desired reward. It is the degree of association of first level outcome of a particular effort to the second level outcome which is the ultimate reward. For example, working hard may lead to better performance which is the first level outcome, and it may result in a reward such as salary increase or promotion or both-which is the second level outcome.

If a person believes that his high performance will not be recognized or lead to expected and desired rewards, he will not be motivated to work hard for better output. Similarly, a professor may work hard to improve upon his techniques of teaching and communication (first level outcome) in order to get promotion and tenure (second level outcome). Accordingly, instrumentality is the performance-reward relationship.

iii. Valence:

Valence is the value a person assigns to his desired reward. He may not be willing to work hard to improve performance if the reward for such improved performance is not what he desires. It is not the actual value of the reward but the perceptual value of the reward in the mind of the worker that is important. A person may be motivated to work hard not to get pay raise but to get recognition and status. Another person may be more interested in job security than status.

Accordingly, according to this model of motivation, the person’s level of effort (motivation) depends upon:

Expectancy – A worker must be confident that his efforts will result in better productivity and that he has the ability to perform the task well.

Instrumentality – The worker must be confident that such high performance will be instrumental in getting desired rewards.

Valence – The worker must value these rewards as desired and satisfactory.

Hence, motivation is related to these three factors as:

Motivational Force (M) = Expectancy (E) x Instrumentality (I) x Valence (V).

or M = (E x I x V)

As the relationship suggests, the motivational force will be the highest when expectancy, instrumentality and valence are all high and the motivational value is greatly reduced when anyone or more of expectancy, instrumentality or valence approaches the value of zero.

The management must recognize and determine the situation as it exists and take steps to improve upon these three factors of expectancy, instrumentality and valence for the purpose of behavioural modification so that these three elements achieve the highest value individually.

For example, if a worker exhibits a poorly motivated behaviour, it could be due to:

i. Low effort-performance expectancy – The worker may lack the necessary skills and training in order to believe that his extra efforts will lead to better performance. The management could provide opportunities for training to improve skills in order to improve the relationship between effort and performance.

ii. Low performance-reward instrumentality relationship – The worker may believe that similar performance does not lead to similar rewards. The reward policy may be inconsistent and may depend upon factors other than simply the performance, which the worker may not be aware of or may not consider fair. Low reward-valence.

Since the managers may look at the value of a reward differently than the worker, the management must investigate the desirability of the rewards, which are given on the basis of performance. While monetary benefits may be more desirable for some workers, the need to be formally appreciated may be more valuable rewards for others for similar task-oriented activities.

The Vroom’s model tries to explain as to what factors affect a person’s choice of a particular course of action among all available alternatives and why a person would be better motivated towards achievement of certain goals as compared to some other goals. Accordingly, managers must understand and analyze the preferences of particular subordinates in order to design “individualized motivational packages” to meet their needs, keeping in mind that all such packages should be perceived as generally fair by all concerned parties.

2. Equity Theory:

Equity theory is based on the assumption of some researchers that one of the most widely assumed source of job dissatisfaction is the feeling of the employees that they are not being treated fairly by the management or the organizational system. The “Equity theory” has two elements. First, the workers want to get a fair reward for their efforts. This “exchange,” meaning reward for efforts, is similar to any other exchange.

If you put in more efforts into your work, you expect to get out of it more rewards. Second, you would compare your rewards with the rewards of others who put in similar efforts. Imagine that you got your MBA from an Ivy League University and are offered a job for $30,000 per year. However, you believe that this offer is not fair and based upon your qualifications and potential contribution to the company; you believe that $35,000 per year would be more equitable. Suppose you do get $35,000 as you hoped for.

This would eliminate the inequity and you are happy. A few days into the job you find out that another person with the same degree and background from the same university was hired at the same time at $40,000 per year. You feel that this is unfair by comparison and thus in your mind a state of inequity exists. This inequity can be a source of dissatisfaction.

Equity theory is based upon the recognition that employees are not only concerned with the rewards that they receive for their efforts but also with the relationship of their rewards with the ones received by others. They make judgements of equity or inequity between their inputs and outcomes and the inputs and outcomes of others. For comparison purposes, the inputs can be considered as efforts, skills, education, experience, competence; and outputs can be considered as salary levels, recognition, raises, status and other privileges.

When such inequity exists, whether it is perceived or real, employees will feel uneasy about it and will tend to take steps that will reduce or eliminate this inequity. These steps may result in lower or higher productivity, improved or reduced quality of output, increased dedication and loyalty or uncaring attitudes, protests against inequity and voluntary resignation.

Equity theory proposes that under-rewarded employees tend to produce less or produce products of inferior equality than equitably rewarded employees, and over-rewarded employees tend to produce more or product of higher quality than equitably rewarded employees.

This must be realized that inequity exists when people are either “underpaid” or “overpaid” for similar efforts. However, they are more willing to accept overpayment by justifying such overpayment than by taking steps to reduce this inequity.

As formulated by Adams, the equity theory comprises of the following postulates:

i. Perceived inequity creates a feeling of resentment and tension within individuals.

ii. The extent of this tension reflects the magnitude and type of inequity.

iii. Individuals will be motivated to take steps to reduce this tension.

iv. The greater the extent of perceived inequity, the greater is the strength of such motivation.

There are a number of steps that a person can take in order to reduce the tension caused by perceived inequity. It must be understood that inequity exists only in the perception of the individual. It may or may not be real.

If people are satisfied in spite of any inequity that might exist or if they can justify inequity by one way or another then in their own perceptions, such inequity does not exist. The following are some of the steps people may take to reduce the extent of such inequity.

i. They may change their inputs either upwards or downwards to a more equitable level. Overpaid workers may justify overpayment by increased efforts and underpaid workers may reduce their level of efforts and be less interested in work by excessive absenteeism and tardiness.

ii. They may alter their outcome to restore equity. The workers may demand better pay and better working conditions for the same input either by staging walkouts and strikes or through organized union negotiations.

iii. They can change input-outcome ratio to more favourable and equitable levels by distorting the values of the inputs or outcomes. They may artificially increase the importance of the jobs they are doing in their own minds or decrease the value of their own input by believing that they are not really working very hard.

For example, if a professor does not get promotion he may justify it by either thinking that “it is not the promotion that counts but helping the students achieves academic excellence” or by believing that “he really did not work very hard in the area of research and publications.”

iv. Employees may resign from their jobs. Employees who feel that they have been inequitably treated at a particular job may find another job where they feel that the input-outcome balance is more favourable and equitable for them.

v. People may change the level of comparison with other employees. In the face of equity, the employees may believe either that other people get better outcomes because they do work harder at it or because they belong to different category with which the comparison is not valid or justified.

For example, a professor from Business Administration division who did not get promotion may compare it equitably with another professor from Social Sciences division who did get promotion by believing that the requirements for promotion for both divisions are not the same or that the professor from Social Science division did work harder to get his promotion.

3. Goal-Setting Theory:

Goal-setting theory is a relatively applied approach to motivation and is based upon the assumption that the type as well as the challenge of the goal induces motivation in the individual to achieve such goal. The theory as proposed by Edwin Locke, studies the processes by which people set goals for themselves and then put in efforts in order to achieve them.

The quality of performance is generally shaped by how difficult and how specifically defined the goal is- General goals such as “do your best,” do not lend to accurate performance appraisal and proportionate rewards. Specific goals are clear and tend to give a clear direction to the worker, resulting in improved performance. Similarly, difficult goals, once accepted, lead to higher performance.

i. Goal Specificity:

A specific goal identifies the target in quantitative terms. This would enable the worker to evaluate his performance and judge as to how he is doing relative to the goal. For example, if a worker is producing 50 units a day, which is the average output, he may set his goal of 60 units a day to be achieved within seven days.

The worker can evaluate this output each day and decide whether he is adequately moving towards that goal. Meeting a goal provides the worker with a sense of achievement, pride and personal satisfaction. General goals, such as “we will produce as much as possible,” have little effect on motivation. Specific goals reduce ambiguity and the worker has very clear idea as to what is expected of him.

ii. Goal Difficulty:

Difficult but feasible goals provide more challenge than easy goals. Reaching an easy target is not competitive and hence hardly exciting. This is particularly true for high need achievers. Goal commitment is independent of whether the goal is set by the worker himself or is assigned by superiors, but depends upon expectations of success and degree of success. Commitment would also depend upon previous rewards for goal achievement.

The most important element of goal setting theory is the acceptance of goal by the workers. Of course, the best way to have the goal accepted by workers is to let them set their own goals within the general organizational guidelines. A goal that one establishes for him becomes an integral part of him. An example is a person’s career objective. A person with self-set goals is most likely to strive harder to achieve them.

Assigned goals are equally acceptable if these goals are consistent with personal aspirations of workers. Acceptance becomes easier if the workers are encouraged to participate in the goal setting process. Goal acceptance can also be facilitated if the management demonstrates a supportive attitude towards subordinates regarding goal achievement.

There is evidence that goal setting, as outlined, improves performance about 90% of the time, and that comparatively high achievers set comparatively more difficult goals and are much more satisfied with intrinsic rewards rather than extrinsic rewards.

4. Management by Objectives (MBO):

A logical extension of goal setting theory is Management by Objectives, which involves systematic and programmatic goal setting throughout an organization. It is a process by which managers and subordinates work together in identifying goals and setting up objectives and make plans together in order to achieve these objectives. These objectives and goals are consistent with the organizational goals.

George Odiorne has explained the concept of MBO as follows:

The system of management by objectives can be described as a process whereby the superior and subordinate managers of an organization jointly identify its common goals, define each individual’s major areas of responsibility in terms of results expected of him and use these measures as guides for operating the unit and assessing, the contribution of each of its members.

Also known as Goal Management, MBO is based upon the assumption that involvement leads to commitment and when an employee participates in goal setting as well as setting standards for measurements of performance towards that goal, then the employee will be motivated to perform better and in a manner that directly contributes to the achievement of organizational objectives.

Some of the elements in the MBO process can be described as follows:

i. Central Goal Settings:

The first basic phase in the MBO process is the defining and clarification of organizational objectives. These are set by the central management and usually in consultation with the other managers. These objectives should be specific and realistic. This process gives the group managers and the top mangers an opportunity to be jointly involved. Once these goals are clearly established, they should be made known to all the members of the organization and be clearly understood by them.

ii. Manager-Subordinate Involvement:

After the organization goals have been set and defined, the subordinates’ work with the managers in setting their individual goals relative to organizational goals. Such joint consultation is important because people become highly motivated in achieving objectives that were set by them to start with.

The goals of the subordinates are specific and short range and primarily indicate what the subordinate’s unit is capable of achieving in a specified period of time. The subordinate must set goals in consultation with the individuals who comprise his unit. In this manner, everyone gets involved in the goal setting.

iii. Matching, Goals and Resources:

The objectives in themselves do not mean anything unless we have resources and means to achieve those objectives accordingly, management must make sure that the subordinates are provided with necessary tools and materials to effectively achieve these goals. If the goals are precisely set, then the resources requirements can also be precisely measured thus making the resource allocation easier. However, just as in goal setting, the allocation of resources should also be done in consultation with the subordinates.

iv. Freedom of Implementation:

The manager-subordinate task force should have adequate freedom in deciding on the utilization of resources and the means of achieving the objectives. As long as these means are within the larger framework of organizational policies, there should be minimum interference by superiors.

v. Review and Appraisal of Performance:

There should be periodic review of progress between manager and the subordinates. These reviews would determine if the individual is making satisfactory progress. They will also reveal if any unanticipated problems have developed. They also help the subordinates understand the process of MBO better.

They also improve the morale of subordinates since the manager is showing active interest in the subordinate’s work and progress. These periodic reviews are necessary since priorities and conditions are constantly changing and these must be periodically monitored.

The concept of MBO is very rich in terms of managerial implications. Managers have a responsibility to assign or set goals in such a manner so as to have the maximum motivational potential. The goals must be tailored to the individual needs and skills, since individuals differ so much in their concept of goals. This would create an optimal performance environment for the employees. When implemented properly MBO has some unique advantages.

These are:

1. Since MBO is result-oriented process and focuses on setting and controlling goals, it encourages managers to do detailed planning. As the planning process is improved, it helps in a better overall management system.

2. The managers are required to establish measurable targets and standards of performance and priorities for these targets. Since the goals are set in consultation with subordinates, these are generally more difficult and challenging than if the superiors had imposed them. Additionally, since these targets are tailored to the particular abilities of the subordinates, it obtains maximum contribution from them thus providing optimum utility of human resources.

3. Both the manager and the subordinates know what is expected of them and therefore there is no role ambiguity or confusion.

4. It makes individuals more aware of company goals. Most often the subordinates are concerned with their own objectives and the environment surrounding them. But with

MBO, the subordinates feel proud of being involved with the organizational goals. This improves their morale and commitment.

5. MBO often highlights the area in which the employees need further training. By taking keen interest in the development of skills and abilities of subordinates, the management provides an opportunity for strengthening those areas that need further refinement thus leading to career development.

6. The system of periodic evaluation lets the subordinates know how well they are doing. Since MBO puts strong emphasis on quantifiable objectives, the measurement and appraisal could be more objective, specific and equitable.

These appraisal methods are superior to trait evaluation, which is based upon such factors as liability, cooperation, loyalty and self- discipline, since they focus on results and not on some subjective intangible characteristics. This evaluation being more objective can be highly morale boosting.

7. It improves communication between management and subordinates. This continuous feedback helps clarify any ambiguities, refine and modify any processes or any aspects of goals. Also, MBO is a kind of control mechanism so that if there are any deviations discovered between the actual performance and the goals, these can be regularly and systematically identified, evaluated and corrected.

Some of the problems and limitations associated with MBO are as follows:

1. In the classical structure of the organization, the authority flows from top to bottom. This creates rigidity and discipline, which generally lead to better performance. Hence, the top management is usually reluctant to support the process of MBO in which their subordinates would take equal part. Accordingly, MBO can only succeed if it has the complete support of top management.

2. Subordinates may dislike MBO. They may be under pressure to get along with the management when setting goals and objectives and these may be set unrealistically high or far too rigid. This may lower their morale and they may become suspicious about the philosophy behind MBO. They may seriously believe that MBO is just another of the management’s trick to make the subordinates work harder and become more dedicated and involved.

3. The emphasis in MBO system is on quantifying the goals and objectives. It does not leave any ground for subjective goals. Some areas are difficult to quantify and more difficult to evaluate. Thus, MBO rewards productivity at the cost of creativity.

4. There is considerable paperwork involved and it takes too much of the manager’s time. Too many meetings and too many reports add to the manager’s responsibility and burden. Some managers may resist the programme because of this increased paperwork.

5. The emphasis is more on short-term goals. Since goals are mostly quantitative in nature, it is difficult to do long-range planning. This is so because all the variables affecting the process of planning cannot be accurately forecast over the long run due to continuously changing socioeconomic and technical environment. This difficulty affects the stability of goals.

6. Most managers may not be sufficiently skilled in interpersonal interaction such as coaching and counselling which is extensively required.

7. The integration of the MBO system with other systems such as forecasting and budgeting is very poor. This makes the overall functioning of all systems very difficult.

8. Group goal achievement is more difficult. When goals of one department depend upon the goals of another department, cohesion is more difficult to obtain. For example, the production department cannot produce a set quota if it is not sufficiently supplied with raw materials and personnel. Similarly, sales department cannot meet its obligation in sales unless production department keeps pace with sales.

9. It takes a lot of time, perhaps three to five years, to implement the MBO programme properly and fully and some research studies have shown that MBO programmes can lose their impact and potency as a motivating force over time.