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
2. Compare and contrast early theories of motivation.
4. Discuss current issues in motivation.
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
rare for lists to be exactly the same. This tells us that people differ in terms of what they
value. Second, use these results to better understand what you’re looking for in a job.
CHAPTER OUTLINE
INTRODUCTION
Managers need to understand and apply motivational concepts and practices to
encourage their employees to devote maximum effort to their jobs. This chapter
explores essential information on the concepts of motivation.
16.1 WHAT IS MOTIVATION?
16.2 EARLY THEORIES OF MOTIVATION
Three early theories of motivation provide the best-known explanations for
employee motivation, even though their validity has been questioned.
A. Maslow’s hierarchy of needs theory was developed by psychologist
Abraham Maslow. This theory states that there is a hierarchy of five
human needs: physiological, safety, social, esteem, and self-actualization
(see Exhibit 16-1).
1. As each need is substantially satisfied, the next need becomes
dominant.
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
social, esteem, and self-actualization).
B. McGregor’s Theory X and Theory Y were developed by Douglas
McGregor and describe two distinct views of human nature.
2. Theory Y is the assumption that employees are creative, enjoy
work, seek responsibility, and can exercise self-direction.
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
assumptions will increase employees’ motivation.
C. Motivation-hygiene theory, developed by Frederick Herzberg, is the
motivation theory that intrinsic factors are related to job satisfaction and
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
D. The three-needs theory, developed by David McClelland, is the
motivation theory that says three acquired (not innate) needs—
achievement, power, and affiliation—are major motives in work.
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.
3. The need for affiliation (nAff) is the desire for friendly and close
interpersonal relationships.
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 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
a. Goal-setting theory deals with people in general;
b. The conclusions of goal-setting theory apply to those who
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?
a. Feedback influences the goal-performance relationship.
b. Goal commitment is most likely to occur when goals are
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.
LEADER MAKING A DIFFERENCE
John Goodnight is the CEO and co-founder of SAS, based in Cary, North Carolina. Mr.
Goodnight founded his software company around the idea of “trust between our
employees and the company.” SAS, which has made Fortune magazine’s list of “Best
Companies to Work For” for all 13 years, is “so legendary that even Google uses SAS as
a model.” With only 2 percent annual turnover and high profitability, Mr. Goodnight has
done an excellent job of recognizing that employees are your most important asset!
What can you learn from this leader making a difference?
Student answers to these questions will vary.
B. Reinforcement Theory is counter to goal-setting theory. It proposes that
behavior is a function of its consequences.
2. Reinforcers are consequences immediately following a response
that increase the probability that the behavior will be repeated.
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.
C. Job Design Theory can be used to influence employee motivation. Job
design is the way tasks are combined to form complete jobs. Managers
should design jobs to reflect the demands of the changing environment as
well as the organization’s technology, and its employees’ skills, abilities,
and preferences of its employees.
1. 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 frequency with which
those tasks are repeated.
a. This type of job design is called job enlargement—the
2. Job enrichment, another approach to designing jobs, is the
vertical expansion of a job by adding planning and evaluating
responsibilities.
a. In job enrichment, job depth, the degree of control
benefits of job enrichment activities.
3. The job characteristics model (JCM) is a framework for
analyzing and designing jobs that identifies five primary job
characteristics, their interrelationships, and their 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
e. Feedback is the degree to which carrying out the work
f. Skill variety, task identity, and task significance combine to
g. The JCM suggests that intrinsic (internal) rewards are
significance).
h. The more these three conditions characterize a job, the
greater the employee’s work motivation, performance, and
D. Equity theory, developed by J. Stacey Adams, is the theory that an
employee compares his/her job’s input-outcomes ratio with that of
relevant others and then corrects any inequity (see Exhibit 16–7).
2. Equity theory recognizes that individuals are concerned with their
3. What will employees do when they perceive an inequity?
a. Distort either their own or others’ inputs or outcomes.
b. Behave in some way to induce others to change their
4. Historically, equity theory focused on distributive justice. Recent
equity research has focused on issues of procedural justice.
F. Expectancy theory is the theory that an individual tends to act in a
certain way based on the expectation that the act will be followed by a
given outcome and on the attractiveness of that outcome to the individual.
Three relationships are important to this theory (see Exhibit 16-8).
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?
5. The key to understanding expectancy theory is understanding an
individual’s goal and the linkage between effort and performance,
between performance and rewards, and between rewards and
individual goal satisfaction.
G. Integrating Contemporary Theories of Motivation
Exhibit 16-9 presents a model that integrates much of what is known
about motivation.
1. The basic foundation is the simplified expectancy model.
16.4 CURRENT ISSUES IN MOTIVATION
Understanding and predicting employee motivation continues to be one of the
most popular areas in management research. Several significant workplace
issues are important to examine in understanding motivation.
A. Motivating in Tough Economic Circumstances
Tough economic times leave companies with tight budgets, minimal or no
pay raises, benefit cuts, no bonuses, and long hours, doing the work of
those who had been laid off. As conditions worsen, employee
confidence, optimism, and job engagement plummet as well. During
these times, managers have to be creative in keeping their employees’
efforts energized, directed, and sustained toward achieving goals. This
means motivating employees in ways that don’t involve money or that
were relatively inexpensive. Suggestions include:
1. Holding meetings with employees to keep the lines of
customer service, to keep everyone focused.
4. Giving employees opportunities to continue to learn and grow.
5. And, of course, an encouraging word always went a long way.
B. Managing Cross-Cultural Motivational Challenges
In today’s global environment, motivational programs that work in one
location may not be effective in another. An American bias exists in some
C. Motivating Unique Groups of Workers
1. 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
split a full-time job.
d. Telecommuting is a job approach where employees work
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,
think in terms of employees and managers.)
Student answers to these questions will vary.
2. Motivating professionals
solving, and support
3. Motivating contingent workers
a. Contingent workers do not have the security or stability
4. Motivating low-skilled, minimum wage workers is one of the most
difficult motivation challenges a manager can face.
a. Although money is important as a motivator, it is not the
answers to motivating low-skilled, minimum wage workers.
D. Designing Appropriate Rewards Programs
1. Open-book management is a motivational approach in which an
organization’s financial statements (the “books”) are shared with
all employees.
a. The goal of open-book management is to motivate
2. Employee recognition programs consist of personal attention
3. 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.
ANSWERS TO REVIEW AND DISCUSSION
QUESTIONS
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?
Goal-setting theory says that specific goals increase performance, and difficult goals,
when accepted, result in higher performance than do easy goals. Important points in
goal setting theory include intention to work toward a goal as a major source of job
motivation; specific hard goals that produce higher levels of output than generalized
goals; participation in setting goals as preferable to assigning goals, but not always;
feedback that guides and motivates behavior, especially self-generated feedback; and
contingencies that affect goal setting—goal commitment, self-efficacy, and national
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
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.
Open-book management is when financial statements (the books) are shared with
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
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
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?
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
WORKING TOGETHER: TEAM EXERCISE
Students are instructed to list and rank order five criteria that would be most important to
them in a job. Then they are to break into small groups and compare responses for
patterns.
You may wish to assign the listing and rank ordering prior to class in order to allow
enough time for students to compile their lists carefully. You may also want to revisit the
“Managing Your Career” box in this chapter, as it provides research results on the topic
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
• 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
• 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
• 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
• 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
• Steve’s and Mary’s recommended readings: Terry R. Bacon, What People Want
(Davies-Black Publishing, 2006); Dennis W. Bakke, Joy at Work (PVG, 2005);
Leon Martel, High Performers (Jossey-Bass, 2002); Jon R. Katzenbach, Peak
Performance (Harvard Business School Press, 2000); and Steven Kerr (ed.),
• Find five different examples of employee recognition programs. These could be
organizations with which you’re familiar, or they could come from articles that you
• Go to the Web site of the Great Place to Work Institute,
www.greatplacetowork.com. What does it say about what makes an organization
a great place to work? Next, locate the site’s lists of the best companies to work
• In your own words, write down three things you learned in this chapter about
being a good manager. (LO: 1, Define motivation, AACSB: Reflective thinking)
(LO: 2, Compare and contrast early theories of motivation, AACSB: Reflective
thinking) (LO: 3, Compare and contrast contemporary theories of motivation,
• Self-knowledge can be a powerful learning tool. Go to mymanagementlab and
complete these self-assessment exercises: What Motivates Me? What Are My
Dominant Needs? What Rewards Do I Value Most? What’s My View on the
Nature of People? How Sensitive Am I to Equity Differences? What’s My Job’s
Motivating Potential? Do I Want an Enriched Job? What Are My Course
Performance Goals? How Confident Am I in My Ability to Succeed? and What’s
My Attitude Toward Achievement? Using the results of your assessments,
ANSWERS TO CASE APPLICATION 1
QUESTIONS
Student answers to these questions will vary.
Passion for the Outdoors and for People
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?
When students hear that companies like Patagonia give such great benefits, they
immediately think, ‘I’d like to work there!’ Students will find a variety of benefits that
attract them to companies like Patagonia. While some may be common to all students,
some will find the lifestyle benefits to be the most important. This shows that it’s not just
about the money anymore for Gen Y. (LO: 4, Discuss current issues in motivation,
AACSB: Reflective thinking)
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?
Setting such a high bar, Patagonia has created a situation where it will be difficult for the
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
ANSWERS TO CASE APPLICATION 2
QUESTIONS
Student answers to these questions will vary.
Best Practices at Best Buy
16–17. Describe the elements of ROWE. What do you think might be the advantages
and drawbacks of this program?
From the Best Buy Web site, “In the Results-Only Work Environment (ROWE) at Best
Buy’s corporate office, our employees are trusted to manage their lives—and their
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?
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?
Unfortunately, many employees see their contributions to their employers based on the
ADDITIONAL CHAPTER INFORMATION