Chapter 16
Motivating Employees
Motivating and rewarding employees is one of the most important and challenging
activities that managers do. To get employees to put forth maximum work effort,
managers need to know how and why they’re motivated. That’s what we discuss in this
chapter. Focus on the following learning objectives as you read and study this chapter.
LEARNING OBJECTIVES
1. Define motivation.
3. Compare and contrast contemporary theories of motivation.
• Develop your skill at motivating employees.
4. Discuss current issues in motivation.
• Know how to identify what motivates you.
It’s Your Career
What Motivates You?
What’s important to you or excites you in a job? Some say “money.” Others might say
“challenging work” or “fun co–workers.” If you have a solid grounding in and
understanding of what motivates you, it can help you make smart career and job
choices. The following is a list of 12 factors that might enter into your decision in
selecting a job. Read over the list. Then rank order the items in terms of importance, with
1 being highest in importance and 12 being lowest in importance.
________ High pay
________ Good working conditions
________ Friendly and supportive colleagues
________ Flexible working hours
________ Opportunities for growth and new challenges
________ Considerate boss
________ Inclusion in decisions that affect you
________ Fair and equitable treatment
________ Job security
________ Promotion potential
________ Excellent benefits (vacation time, retirement contributions, etc.)
________ Freedom and independence
Now, compare your list with others in your class. How similar were your preferences? It’s
16.1 WHAT IS MOTIVATION?
16.2 EARLY THEORIES OF MOTIVATION
Three early theories of motivation provide the best-known explanations for
2. The text describes these five needs as physiological (basic food,
drink, water, shelter, and sexual needs); safety (security and
3. Maslow separated the needs into lower-level needs (including the
physiological and safety needs) and higher-level needs (including
1. Theory X is the assumption that employees dislike work, are lazy,
avoid responsibility, and must be coerced to perform.
3. Theory X assumes that Maslow’s lower-order needs dominate
4. No empirical evidence exists to confirm that either set of
assumptions is valid or that altering behavior based on Theory Y
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motivation theory that intrinsic factors are related to job satisfaction and
motivation, whereas extrinsic factors are associated with job
dissatisfaction (see Exhibit 16-2).
1. Herzberg believed that the opposite of satisfaction was not
2. Hygiene factors are factors that eliminate dissatisfaction. They
3. Motivators are factors that increase job satisfaction and
4. Herzberg’s theory has been criticized for the statistical procedures
and methodology used in his study. In spite of these criticisms,
1. The need for achievement (nAch) is the drive to excel, to
achieve in relation to a set of standards, and to strive to succeed.
2. The need for power (nPow) is the need to make others behave in
a way that they would not have behaved otherwise.
4. A person’s levels of these three needs are typically measured by
16.3 CONTEMPORARY THEORIES OF MOTIVATION
A number of contemporary theories represent state-of–the-art explanations of
employee motivation. These contemporary theories have a reasonably strong
degree of validity through supporting documentation.
A. Goal-Setting Theory. Goal-setting theory is the proposition that specific
goals increase performance, and difficult goals, when accepted, result in
higher performance than easy goals. What is known about goals as
motivators?
1. Intention to work toward a goal is a major source of job motivation.
2. Is there a contradiction between achievement motivation and goal
setting? No, as the following points explain:
3. Will employees try harder if they participate in the planning and
formulation of goals?
4. Will people do better when they get feedback on how well they are
progressing toward their goals?
5. What four contingencies exist in goal-setting theory?
6. One may conclude that intentions, as defined by hard and specific
goals, are a powerful motivating force in goal-setting efforts.
a. In the proper conditions, intentions can lead to higher
performance.
b. However, no evidence exists that such goals are
associated with increased job satisfaction.
c. Exhibit 16-5 summarizes the relationships among goals,
motivation, and performance.
LEADER MAKING A DIFFERENCE
Susan Wojcicki, CEO of YouTube, has an interesting job in that she is responsible for
leading and motivating people who don’t actually work for her as well as those that do.
Wojcicki recognizes that without the individuals who provide the content for YouTube,
known as creators, the company cannot exist. Prior to her tenure as CEO, the
relationship between creators and YouTube management was not always a positive one.
Wojcicki sought to change that situation by meeting with creators and listening to their
goals and needs. Based on her findings, she has made a concerted effort to address
the concerns raised by creators.
What can you learn from this leader making a difference?
1. Reinforcement theory argues that behavior is externally caused.
3. Reinforcement theory ignores factors such as goals, expectations,
4. How can the concept of reinforcement be used to explain
motivation?
5. Managers can influence employees’ behavior by reinforcing the
work behaviors they desire.
1. Job Enlargement. One of the earliest efforts at overcoming the
drawbacks of job specialization was through increasing job
scope, the number of different tasks required in a job and the
2. Job Enrichment. Job enrichment, another approach to designing
jobs, is the vertical expansion of a job by adding planning and
3. Job Characteristics Model. The job characteristics model (JCM)
is a framework for analyzing and designing jobs that identifies five
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impact on employee productivity, motivation, and satisfaction.
These five job dimensions are described below (see Exhibit 16–
6):
a. Skill variety is the degree to which a job requires a variety
of activities so that an employee can use a number of
different skills and talents.
b. Task identity is the degree to which a job requires
effectiveness of his or her performance.
f. Skill variety, task identity, and task significance combine to
create meaningful work. Autonomy leads to an increased
sense of responsibility for outcomes of the work. Feedback
leads to knowledge of the actual results of the work
1. Combine tasks.
3. Establish client (external or internal) relationships.
5. Open feedback channels.
4. Redesigning Job Design Approaches. Two new approaches to job
design are prompting a rethinking on the JCM and other standard
approaches.
a. The relational perspective of work design focuses on
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amount of task interdependence, and interpersonal
feedback
b. The proactive perspective of work design suggests that
employees are taking the initiative to change how their
work is performed.
1. One stream of research that’s relevant to proactive
work design is high-involvement work practices,
2. Equity theory recognizes that individuals are concerned with their
3. What will employees do when they perceive an inequity?
4. Historically, equity theory focused on distributive justice. Recent
equity research has focused on issues of procedural justice.
1. Effort-performance linkage (expectancy) is the probability
2. Performance-reward linkage (instrumentality) is the degree to
3. Attractiveness of the reward (valence) is the importance that the
4. Four features are inherent in expectancy theory:
a. What perceived outcomes does the job offer the
employee?
b. How attractive do employees consider these outcomes to
be?
c. What kind of behavior must the employee exhibit to
achieve these outcomes?
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d. How does the employee view his or her chance of doing
what is asked?
5. The key to understanding expectancy theory is understanding an
individual’s goal and the linkage between effort and performance,
1. The basic foundation is the simplified expectancy model.
3. Rewards also play an important role in the model.
16.4 CURRENT ISSUES IN MOTIVATION
Understanding and predicting employee motivation continues to be one of the
1. An American bias exists in some of the motivational theories. For
2. There are some cross-cultural consistencies though. Recent
research showed that being treated with respect, having a good
1. Motivating a Diverse Workforce. Motivating a diverse workforce
requires managers to think in terms of flexibility. Lifestyle (e.g.,
single parenthood) is an important factor.
a. A compressed workweek is a workweek where employees
work longer hours per day but fewer days per week.
b. Flexible work hours (flextime) is a scheduling system in
which employees are required to work a number of hours a
week but are free, within limits, to vary the hours of work.
c. Job sharing is the practice of having two or more people
split a full-time job.
d. Telecommuting is a job approach where employees work
at home and are linked to the workplace by computer and
modem.
e. The advantages of telecommuting include a decrease in
the time and stress of commuting and an increase in
flexibility to cope with family demands.
f. Drawbacks of telecommuting center on the lack of social
contact, the reward system used, and the separation of
organization work and homework.
FUTURE VISION: Individualized Rewards
Traditionally organizations have taken a one size fits all approach toward providing
benefits. However, considering the diversity of today’s workforce, more organizations
are modifying their compensation packages to include a variety of packages. Some of
the rewards organizations can provide include: increased base pay, bonuses, shortened
workweeks, extended vacations, paid sabbaticals, flexible work hours, part-time
employment, guaranteed job security, increased pension contributions, college tuition
reimbursement, personal days off, help in purchasing a home, recognition awards, paid
club memberships, and work–from-home options.
The following discussion questions are posed:
Talk About It 1: What are the positive aspects of having individualized rewards? (Think in
terms of employees and managers.)
Talk About It 2: What are the negative aspects of having individualized rewards? (Again,
3. Motivating Contingent Workers. Contingent workers do not have
the security or stability that permanent employees do.
4. Motivating Low-Skilled, Minimum Wage Workers. This is one of
the most difficult motivation challenges a manager can face.
1. Open-Book Management. Open–book management is a
motivational approach in which an organization’s financial
statements (the “books”) are shared with all employees.
2. Employee Recognition Programs. Employee recognition
3. Pay-for-Performance. Pay-for-performance programs are
variable compensation plans that pay employees on the basis of
some performance measure.
a. Performance-based compensation is probably most
compatible with expectancy theory.
b. The increasing popularity of pay–for-performance programs
can be explained in terms of both motivation and cost
control.
c. Do pay-for-performance programs work? Studies seem to
16–1. What is motivation? Explain the three key elements of motivation.
16–2. Describe each of the four early theories of motivation.
In Maslow’s hierarchy, individuals move up the hierarchy of five needs (physiological,
safety, social, esteem, and self-actualization) as needs are substantially satisfied. A
need that’s substantially satisfied no longer motivates. A Theory X manager believes
16–3. How do goal-setting, reinforcement, and equity theories explain employee
motivation?
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Equity theory focuses on how employees compare their inputs–outcomes ratios to
relevant others’ ratios. A perception of inequity will cause an employee to do something
about it. Procedural justice has a greater influence on employee satisfaction than does
distributive justice. (LO: 3, Compare and contrast contemporary theories of motivation,
AACSB: Analytical thinking)
16–4. What are the different job design approaches to motivation?
16–5. Explain the three key linkages in expectancy theory and their role in motivation.
Expectancy theory says that an individual tends to act in a certain way based on the
expectation that the act will be followed by a desired outcome. Expectancy is the effort–
performance linkage (how much effort do I need to exert to achieve a certain level of
performance); instrumentality is the performance-reward linkage (achieving at a certain
level of performance will get me a specific reward); and valence is the attractiveness
of the reward (is it the reward that I want?). (LO: 3, Compare and contrast contemporary
16-6. What challenges do managers face in motivating today’s workforce?
16-7. Describe open book management, employee recognition, and pay–for-performance
programs.
16-8. Can an individual be too motivated? Discuss.
This question can serve as an excellent springboard for small group discussion.
Students may express strong opinions in their answers to this question, depending upon
their employment experiences and the types of managers and employees with whom
they have already worked. Their answers to this question will likely introduce ethical
considerations in relation to motivation and the willingness of some individuals to lose
sight of ethical standards in pursuit of a goal. (LO: 4, Discuss current issues in
motivation, AACSB: Analytical thinking)
PERSONAL INVENTORY ASSESSMENTS
Student answers to these questions will vary.
ETHICS DILEMMA
Student answers to these questions will vary.
Advocates of open-book management point to the advantages of getting employees to
think like owners and being motivated to make better decisions about how they
do their work once they see how their decisions impact financial results. However, is
there such a thing as “too much openness?” At some companies, employees not only
16–11. What do you think? What are the pros and cons of such an approach?
16–12. What potential ethical issues do you see here? How might managers address
these ethical issues?
(LO: 4, Discuss current issues in motivation, AACSB: Ethical understanding and
reasoning)
SKILLS EXERCISE: DEVELOPING YOUR MOTIVATING
EMPLOYEES SKILL
Several suggestions for motivating employees are provided, based on what is currently
known about motivation.
A. Recognize individual differences in terms of needs, attitudes, personality,
and other important individual factors.
B. Match people to jobs by identifying what needs are important to
individuals and trying to provide jobs that allow them to fulfill those needs.
C. Use goals because the literature on goal setting suggests that managers
should ensure that employees have hard, specific goals and feedback on
how well they are performing in pursuit of those goals.
D. Ensure that goals are perceived as attainable. Employees who see goals
as unattainable will reduce their levels of effort.
E. Individualize rewards. Because employees have different needs, what is
a reward and reinforcer to one may not work for another.
F. Link rewards to performance by making rewards contingent on desired
levels of performance.
G. Check the system for equity. Employees should perceive that the rewards
or outcomes are equal to the inputs given.
H. Don’t ignore money. The allocation of performance-based increases,
piecework bonuses, and other pay incentives is important in determining
employee motivation.
(LO: 2, Compare and contrast early theories of motivation, AACSB: Communication
abilities) (LO: 3, Compare and contrast contemporary theories of motivation, AACSB:
Written and oral communication)
WORKING TOGETHER: TEAM EXERCISE
Students are asked to reflect on past jobs and think about what motivates them at work.
Then, working in groups of three or four, students are asked to share their thoughts and
discuss what management or organizational leaders could have done differently.
(LO:1, Define motivation, AACSB: Reflective thinking) (LO: 2, Compare and contrast
early theories of motivation, AACSB: Written and oral communication) (LO: 3, Compare
and contrast contemporary theories of motivation, AACSB: Written and oral
communication)
MY TURN TO BE A MANAGER
• A good habit to get into if you don’t already do it is goal-setting. Set goals for
yourself using the suggestions from goal-setting theory. Write them down and
keep them in a notebook. Track your progress toward achieving these goals.
(LO: 3, Compare and contrast contemporary theories of motivation, AACSB:
Reflective thinking)
• Describe a task you’ve done recently for which you exerted a high level of effort.
Explain your behavior, using any three of the motivation approaches described in
this chapter. (LO: 3, Compare and contrast contemporary theories of motivation,
AACSB: Reflective thinking)
• Pay attention to times when you’re highly motivated and times when you’re not
as motivated. Write down a description of these times. What accounts for the
difference in your level of motivation? (LO: 1, Define motivation, AACSB:
Reflective thinking)
• Interview three managers about how they motivate their employees. What have
they found that works best? Write up your findings in a report and be prepared to
present it in class. (LO: 1, Define motivation, AACSB: Analytical thinking)
• Using the job characteristics model, redesign the following jobs to be more
motivating: retail store sales associate, utility company meter reader, and
checkout cashier at a discount store. In a written report, describe for each job at
least two specific actions you would take for each of the five core job dimensions.
(LO: 3, Compare and contrast contemporary theories of motivation, AACSB:
Reflective thinking)
• Do some serious thinking about what you want from the job you get after
graduation. Make a list of what’s important to you. Are you looking for a pleasant
work environment, challenging work, flexible work hours, fun coworkers, or
something else? Discuss how you will discover whether a particular job will help
you get those things. (LO: 3, Compare and contrast contemporary theories of
motivation, AACSB: Reflective thinking)
• Find three different examples of employee recognition programs from
organizations with which you’re familiar. Write a report describing your examples
and evaluating what you think about the various approaches. (LO: 4, Discuss
current issues in motivation, AACSB: Analytical thinking)
• Have you ever participated in a pay-for-performance program? If not, ask your
friends and find someone who has participated in such a program. Consider your
or your friend’s program. Was it effective in motivating employees? Why or why
not? How could the program be improved? (LO: 4, Discuss current issues in
16-13. What would it be like to work at Patagonia? (Hint: Go to Patagonia’s Web site and
find the section on jobs.) What’s your assessment of the company’s work environment?
16–14. Using what you’ve learned from studying the various motivation theories, what
does Patagonia’s situation tell you about employee motivation?
16–15. What do you think might be Patagonia’s biggest challenge in keeping employees
motivated?
16–16. If you were managing a team of Patagonia employees in the retail stores, how
would you keep them motivated?
Patagonia has excelled at providing employees with an exciting organizational culture
and a wide array of benefits. They have effectively positioned themselves as a leader in
the industry for providing a wonderful place to work (described as paradise by some).
Ask students from a Generation Y perspective what could Patagonia do to continue to
develop this culture of success? (LO: 4, Discuss current issues in motivation, AACSB:
16–17. Describe the elements of ROWE. What do you think might be the advantages
and drawbacks of this program?
16–18. Using one or more motivation theories from the chapter, explain why you think
ROWE works.
This program fits in with several theories of motivation: Theory Y—giving employees
16–19. What might be the challenges for managers in motivating employees in a
program like this?
16–20. Does this sound like something you would be comfortable with? Why or why not?
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Most students should report a preference for this type of arrangement. This is especially
true of Gen X and Gen Y employees who value greater flexibility. Some however, may
be put off by the high degree of autonomy granted to employees. Too much freedom
may actually intimidate some workers. (LO: 4, Discuss current issues in motivation,
AACSB: Reflective thinking)
16–21. What’s your interpretation of the statement that “Work isn’t a place you go—it’s
something you do”? Do you agree? Why or why not?