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CHAPTER 8
Motivation and Empowerment
Chapter Outline
Leadership and Motivation
Needs-Based Theories of Motivation
Other Motivation Theories
Empowering People to Meet Higher Needs
Giving Meaning to Work through Engagement
New Ideas for Motivation
In the Lead
Paul Michaels, Mars Incorporated
Ralcorp
Cathy Lewis and Rob Devey, Prudential UK and Europe
Leader’s Self-Insight
Are Your Needs Met?
Your Approach to Motivating Others
Are You Engaged?
Summary and Interpretation
This chapter introduced a number of important ideas about motivating people in organizations.
Individuals are motivated to act by various motives and to satisfy a range of needs. The
leadership approach to motivation tends to focus on positive motives and meeting the higher
needs of employees. The role of the leader is to create a situation in which followers’ higher
needs and the needs of the organization can be met simultaneously. Needs-based theories focus
on the underlying needs that motivate how people behave. Maslow’s hierarchy of needs proposes
that individuals satisfy lower needs before they move on to higher needs. Herzberg’s two-factor
theory holds that dissatisfiers must be removed and motivators then added to cause high
motivation. McClelland asserted that people are motivated differently depending on which needs
they have acquired.
Other motivation theories, including the reinforcement perspective, expectancy theory, and
equity theory, focus primarily on extrinsic rewards and punishments, sometimes called carrot-
and-stick methods of motivation. The reinforcement perspective proposes that behavior can be
modified by the use of rewards and punishments. Expectancy theory is based on the idea that a
Employee engagement is tied to the trend toward helping employees find value and meaning in
their jobs. The most motivated employees are engaged employees who enjoy their jobs and feel
they are making a valuable contribution. Engaged employees contribute enthusiastically to
meeting goals. Leaders create the environment that determines employee engagement.
Two recent motivational ideas that relate to engagement are the making progress principle and
creating a thriving workforce. Research suggests that the single most important factor for
motivation is a sense of making progress toward meaningful goals. A thriving workforce is made
up of people who are enthusiastically learning and growing as they acquire new knowledge and
skills to apply in their current jobs or in the future.
Your Leadership Challenge
After reading this chapter, you should be able to:
• Recognize and apply the difference between intrinsic and extrinsic rewards.
• Appropriately tap into the motives that induce people to take action to accomplish
important goals.
• Motivate others by meeting their higher-level needs.
• Apply needs-based theories of motivation and understand how the concept of equity
applies to motivation.
• Describe the psychological and structural elements of empowerment and how
Key Terms and Concepts
Motivation: the forces either internal or external to a person that arouse enthusiasm and
persistence to pursue a certain course of action.
Intrinsic rewards: internal satisfactions a person receives in the process of performing a
particular action.
Extrinsic rewards: rewards given by another person, typically a supervisor, such as pay
increases and promotions.
Hierarchy of needs theory: Maslow’s theory proposes that humans are motivated by multiple
needs and those needs exist in a hierarchical order.
Hygiene factors: the first dimension of Herzberg’s two-factor theory; involves working
conditions, pay, company policies, and interpersonal relationships.
Motivators: the second dimension of Herzberg’s two-factor theory; involves job satisfaction and
meeting higher-level needs such as achievement, recognition, and opportunity for growth.
Reinforcement: anything that causes a certain behavior to be repeated or inhibited.
Positive reinforcement: the administration of a pleasant and rewarding consequence
following a behavior.
Negative reinforcement: the withdrawal of an unpleasant consequence once a behavior is
improved.
Empowerment: power sharing; the delegation of power or authority to subordinates in the
organization.
Job design: structuring jobs in a way to meet higher level needs and increase motivation
toward the accomplishment of goals.
Job characteristics model: a model of job design that considers the core job dimensions of
skill variety, task identity, task significance, autonomy, and feedback to enrich jobs and
increase their motivational potential.
Job enrichment: a motivational approach that incorporates high-level motivators into the work,
including job responsibility, recognition, and opportunities for growth, learning, and
achievement.
Engagement: when people enjoy their jobs and are satisfied with their work conditions,
contribute enthusiastically to meeting team and organizational goals, and feel a sense of
belonging and commitment to the organization.
Introduction
John Parry, CEO of Solix Inc., knew something had to be done. Solix, a business process
outsourcing company, had recently been spun off from a larger company, and leaders were
grappling with a number of serious problems. Turnover was verging on 20 percent a year, and
people were frequently absent or tardy because they just didn’t want to come to work. To beat it
all, Solix wasn’t making any money. As leaders considered what to do, Parry decided it might be
a good idea to ask Solix’s employees. He met with each employee individually to ask what
people wanted and needed to be more engaged and committed, have happier lives, and make the
company more successful.
The result was that Parry threw out the company’s top-down, authoritarian management system
in favor of a plan that has leaders and employees working more like partners. He ended the rigid
8.00 A.M. to 6.00 P.M. workday that required managers to be present to oversee employees.
Instead, he opened the office 24 hours a day and allowed people to set their own flexible
Annotated Lecture/Outline
Leadership Challenge #1: Recognize and apply the difference between intrinsic and extrinsic
rewards.
Leadership Challenge #3: Motivate others by meeting their higher-level needs.
I. Leadership and Motivation
Motivation refers to the forces either internal or external to a person that arouse enthusiasm and
persistence to pursue a certain course of action. Employee motivation affects productivity, so
Exhibit 8.1: A Simple Model of Motivation
The importance of motivation is that it can lead to behaviors that reflect high performance
within organizations. Studies have found that high employee motivation and high
organizational performance and profits go hand in hand. An extensive survey by the Gallup
organization, for example, found that when all of an organization’s employees are highly
motivated and performing at their peak, customers are 70 percent more loyal, turnover drops by
A. Intrinsic and Extrinsic Rewards
Intrinsic rewards are the internal satisfactions a person receives in the process of performing
a particular action. An intrinsic reward is internal and under the control of the individual, such
as to engage in task behavior to satisfy a need for competency and self-determination.
Extrinsic rewards are given by another person, typically a supervisor, and include
promotions and pay increases. Because they originate externally as a result of pleasing others,
New Leader Action Memo: As a leader, you can provide extrinsic rewards such as promotions,
pay raises, and praise, but also help followers achieve intrinsic rewards and meet their higher-
level needs for accomplishment, growth, and fulfillment.
Exhibit 8.2: Needs of People and Motivation Methods
Conventional management approaches often appeal to an individual’s lower, basic needs and
rely on extrinsic rewards and punishments to motivate people to behave in desired ways.
These approaches are effective, but they are based on controlling the behavior of employees
by manipulating their decisions about how to act. The leadership approach strives to motivate
people by providing them with the opportunity to satisfy higher needs and become
B. Positive and Negative Motives
People have both positive and negative motives that cause them to engage in specific
behaviors or activities.
Exhibit 8.3: Four Categories of Motives
Good leaders rely on positive motives as much as they can. However, negative approaches
also have value. In the real world, almost every leader sometimes has to impose some form of
punishment or tap into negative motives to get desired actions and results.
Fear can be a powerful motivator, but using fear to motivate people almost always has
negative consequences for employee development and long-term performance. Effective
leaders avoid the use of fear tactics.
Discussion Question #7: Can you think of specific motivational techniques that would motivate
you in each of the four categories in Exhibit 8.3 (positive extrinsic, positive intrinsic, negative
extrinsic, negative intrinsic)? Describe them.
Notes_________________________________________________________________________
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Leadership Challenge #4: Apply needs-based theories of motivation and understand how the
concept of equity applies to motivation.
II. Needs-Based Theories of Motivation
Needs-based theories emphasize the needs that motivate people. Needs are the source of an
internal drive that motivates behavior to fulfill the needs. An individual’s needs are like a hidden
catalog of the things he or she wants and will work to get. To the extent that leaders understand
follower needs, they can design the reward system to direct energies and priorities toward
attainment of shared goals.
A. Hierarchy of Needs Theory
Abraham Maslow’s hierarchy of needs theory proposes that humans are motivated by
multiple needs and those needs exist in a hierarchical order, wherein the higher needs cannot
be satisfied until the lower needs are met. Maslow identified five general levels of motivating
needs:
• Physiological. The most basic human physiological needs include food, water, and
oxygen. In the organizational setting, these are reflected in the needs for adequate heat,
air, and base salary to ensure survival.
• Safety. The need for a safe and secure physical and emotional environment and freedom
from threats threats—that is, for freedom from violence and for an orderly society. In an
organizational setting, safety needs reflect the needs for safe jobs, fringe benefits, and
job security.
Exhibit 8.4: Maslow’s Hierarchy of Needs
Discussion Question #1: Describe the kinds of needs that people bring to an organization. How
might a person’s personality characteristics such as introversion/extroversion or openness to
experience, as described in Chapter 4, influence the needs he or she brings to work?
Notes_________________________________________________________________________
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B. Two-Factor Theory
Frederick Herzberg developed another popular needs-based theory of motivation called the
two-factor theory. Herzberg interviewed hundreds of workers about times when they were
Exhibit 8.5: Herzberg’s Two-Factor Theory
New Leader Action Memo: You can evaluate your current or a previous job according to
Maslow’s needs theory and Herzberg’s two-factor theory by answering the questions in Leader’s
Self-Insight 8.1.
Herzberg believed that two entirely separate dimensions contribute to an employee’s behavior
at work. Hygiene factors, the first dimension, involve the presence or absence of job
dissatisfiers, such as working conditions, pay, company policies, and interpersonal
relationships. When hygiene factors are poor, work is dissatisfying. Good hygiene factors
remove the dissatisfaction, but they do not in themselves cause people to become highly
satisfied and motivated in their work.
In The Lead: Paul Michaels, Mars Incorporated
President Paul Michaels and other leaders at Mars, maker of candy such as M&Ms and Snickers
and pet food such as Pedigree and Whiskas, seem to meet all the need categories in terms of both
hygiene factors and motivators. Mars Incorporated, the third largest private company in the
United States, is intensely secretive, but an interview by Fortune after the company was named
to its “The 100 Best Companies to Work For” list for the first time in 2013 revealed some
interesting tidbits.
In addition to the egalitarian workplace, motivators include giving people the autonomy to
experiment and propose new ideas and recognizing them for showing initiative. Employees have
great opportunities for advancement, both within their division and in the larger corporation.
Leaders encourage employee growth and development.
The implication of the two-factor theory for leaders is clear. People have multiple needs, and
the leader’s role is to go beyond the removal of dissatisfiers to the use of motivators to meet
higher-level needs and propel employees toward greater enthusiasm and satisfaction.
Discussion Question #4: Google wants employees to mingle more but not to waste a lot of time.
So as part of its “people strategy,” Google analyzes reams of data to determine the optimal size
Notes_________________________________________________________________________
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C. Acquired Needs Theory
David McClelland’s acquired needs theory proposes that certain types of needs
(achievement, affiliation, power) are acquired during an individual's lifetime. Three needs
most frequently studied are as follows:
• Need for achievement—the desire to accomplish something difficult, attain a high
standard of success, master complex tasks, and surpass others.
• Need for affiliation—the desire to form close personal relationships, avoid conflict, and
establish warm friendships.
New Leader Action Memo: As a leader, you can use good working conditions, satisfactory pay,
and comfortable relationships to reduce job dissatisfaction. To spur greater follower satisfaction
and enthusiasm, you can employ motivators— challenge, responsibility, and recognition.
Discussion Question #10: As part of the federal health-care overhaul in the United States,
patient satisfaction survey scores are now used to help determine how much the federal
government will pay medical facilities for treating patients on Medicare. What motivation
theory described in the chapter does this example illustrate? Do you think this approach will
motivate employees to provide better care? What might be some potential problems with this
approach?
Notes_________________________________________________________________________
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Leadership Challenge #8: Build a thriving workforce by giving people a sense of making
progress toward meaningful goals.
III. Other Motivation Theories
Three other motivational theories—the reinforcement perspective, expectancy theory, and equity
theory—focus primarily on extrinsic rewards and punishments. Relying on extrinsic rewards and
punishments is sometimes referred to as the carrot-and-stick approach. Behavior that produces a
desired outcome is rewarded with a “carrot,” such as a pay raise or promotion. Conversely,
undesirable or unproductive behavior brings the “stick,” such as a demotion or withholding a pay
raise. Carrot-and-stick approaches tend to focus on lower needs, although higher needs can
sometimes also be met.
Consider This: Does the Carrot Kill Satisfaction?
A shopkeeper got tired of the noise of a group of children who played outside his store every
afternoon. One day, he asked them to leave and promised he’d give each of them $1 to come
back and play there the next day. Of course, they showed up. Then the shopkeeper said he would
give each one 50 cents to come back the following day. The next day he offered 25 cents for
A. Reinforcement Perspective on Motivation
Reinforcement theory simply looks at the relationship between behavior and its
consequences by changing or modifying followers’ on-the-job behavior through the
appropriate use of immediate rewards or punishments.
Behavior modification is the set of techniques by which reinforcement theory is used to
modify behavior. The basic assumption underlying behavior modification is the law of effect
which states that:
• Positively reinforced behavior tends to be repeated.
• Behavior that is not reinforced tends not to be repeated.
Exhibit 8.6: Shaping Behavior with Reinforcement
Reinforcement is defined as anything that causes a certain behavior to be repeated or
inhibited. Four ways in which leaders use reinforcement to modify or shape employee
behavior are as follows:
• Positive reinforcement—the administration of a pleasant and rewarding consequence
following a behavior; for example, praise for an employee who does a little extra in his
or her work.
• Negative reinforcement—the withdrawal of an unpleasant consequence once a
behavior is improved; sometimes referred to as avoidance learning. The idea is that
New Leader Action Memo: As a leader, you can change follower behavior through the
appropriate use of rewards and punishments. To establish new behaviors quickly, you can
reinforce the desired behavior after each and every occurrence. To sustain the behaviors over a
long time period try reinforcing the behaviors intermittently.
Leaders can apply reinforcement theory to influence the behavior of followers. They can
reinforce behavior after each and every occurrence, which is referred to as continuous
reinforcement, or they can choose to reinforce behavior intermittently, which is referred to as
partial reinforcement. With partial reinforcement, the behavior is reinforced often enough to
B. Expectancy Theory
Expectancy theory suggests that motivation depends on individuals' mental expectations
about their ability to perform tasks and receive desired rewards. Expectancy theory is
associated with the work of Victor Vroom, although a number of scholars have made
contributions in this area. Expectancy theory is concerned not with understanding types of
needs but with the thinking process that individuals use to achieve rewards.
Expectancy theory is based on the relationship among:
• The individual's effort (E).
• The possibility of high performance (P).
• The desirability of outcomes following high performance (O).
Exhibit 8.7: Key Elements of Expectancy Theory
The E>P expectancy is the probability that putting effort into a task will lead to high
performance. For this expectancy to be high, the individual must have the ability, previous
experience, and necessary tools, information, and opportunity to perform.
The P>O expectancy involves whether successful performance will lead to the desired
outcome. If this expectancy is high, the individual will be more highly motivated. Valence
Expectancy theory is personalized to subordinates' needs and goals. Every person is different,
so leaders have to use a mix of incentives and rewards to motivate. A leader’s responsibility is
to understand each follower’s “unique motivational profile” and then help followers meet
their needs while attaining organizational goals.
Discussion Question #6: One small business owner says she doesn’t offer her sales
representatives incentives because people try to sabotage one another to get more business and
stop paying attention to smaller accounts. As a leader, how would you develop a program to
motivate and reward high performers without promoting the wrong type of behavior?
Notes_________________________________________________________________________
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C. Equity Theory
Sometimes employees’ motivation is affected not only by their expectancies and the rewards
they receive but also by their perceptions of how fairly they are treated in relation to others.
New Leader Action Memo: Expectancy theory and reinforcement theory are widely used in all
types of organizations and leadership situations. The questionnaire in Leader’s Self-Insight 8.2
gives you the opportunity to see how effectively you apply these motivational ideas in your own
leadership.
People evaluate equity by a ratio of inputs to outcomes. That is, employees make comparisons
of what they put into a job and the rewards they receive relative to those of other people in the
organization. Inputs include such things as education, experience, effort, and ability.
Outcomes include pay, recognition, promotions, and other rewards. A state of equity exists
Discussion Question # 2: With the economy in a slump, some companies are secretively freezing
pay raises or even cutting pay for some employees so they can offer substantial raises to people
considered star performers. As a motivational technique, does this practice seem like a good one
to you? What might be some disadvantages of this technique?
Notes_________________________________________________________________________
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Leadership Challenge #5: Describe the psychological and structural elements of empowerment
and how empowerment contributes to motivation.
IV. Empowering People to Meet Higher Needs
New Leader Action Memo: As a leader, you can clarify the rewards a follower desires and
ensure that he or she has the knowledge, skills, resources, and support to perform and obtain the
desired rewards. You can keep in mind that perceived equity or inequity in rewards also
influences motivation.
Empowerment refers to power sharing, the delegation of power or authority to subordinates in
A. The Psychological Model of Empowerment
Empowerment provides strong motivation because individuals have a sense that they are in
control of their work and success. Research indicates that most people have a need for self-
efficacy, which is the capacity to produce results or outcomes, to feel that they are effective.
New Leader Action Memo: As a leader, you can give employees greater power and authority
to help meet higher motivational needs. You can implement empowerment by providing the five
elements of information, knowledge, discretion, significance, and rewards.
Five elements must be in place before employees can be truly empowered to perform their
jobs effectively: information, knowledge, discretion, meaning, and rewards.
• Employees receive information about company performance.
B. Job Design for Empowerment
Job design refers to structuring jobs in a way to meet higher-level needs and increase
motivation toward the accomplishment of goals. One model, called the job characteristics
model, proposes that certain core job dimensions create positive psychological reactions
within employees that lead to higher motivation and better performance.
Exhibit 8.8: The Job Characteristics Model
Leaders can make alterations in five dimensions of jobs to increase the job’s motivational and
empowerment potential:
• Increase skill variety. Jobs with a variety of activities require a diversity of skills and are
thus more motivating.
The more these five characteristics can be designed into the job, the higher
employees’motivation will be, and the higher will be their performance. Essentially, these
changes are designed to transfer authority and responsibility from leaders to employees and
In The Lead: Ralcorp
One way to enrich an oversimplified job is to enlarge it, that is, to extend the responsibility to
cover several tasks instead of only one. At Ralcorp’s cereal manufacturing plant, leaders
combined several packing positions into a single job and cross-trained employees to operate all
of the packing line’s equipment. Employees were given both the ability and the responsibility to
perform all the various functions in their department, not just a single task.
and the success of the company. Ralcorp invests heavily in training to be sure employees have
the needed operational skills as well as the ability to make decisions, solve problems, manage
quality, and contribute to continuous improvement.
The first three dimensions—higher skill variety, task identity, and task significance—enable
the employee to see the job as meaningful and significant (experienced meaningfulness of
work), which makes the job intrinsically satisfying. Greater autonomy in a job leads to a
C. Empowerment Applications
Current methods of empowering employees can be classified based on two dimensions:
• The extent to which employees are involved in defining desired outcomes
• The extent to which they participate in determining how to achieve those outcomes.
Exhibit 8.9: Degrees of Empowerment
When employees are fully empowered, they are involved in defining mission and goals as
well as in determining how to achieve them.
V. Giving Meaning to Work Through Engagement
New Leader Action Memo: Take the quiz in Leader’s Self-Insight 8.3 to evaluate your level of
engagement for a college course you enjoyed compared to one you did not enjoy.
One path to meaning is through employee engagement. Engagement means that people enjoy
their jobs and are satisfied with their work conditions, contribute enthusiastically to meeting
team and organizational goals, and feel a sense of belonging and commitment to the
organization. Fully engaged employees care deeply about the organization and actively seek
ways to serve the mission. Research has shown that company performance and profitability
improve as the engagement level of employees increases.
It is the behavior of leaders that makes the biggest difference in whether people feel engaged at
work. A leader’s role is not to control others but to organize the workplace in such a way that
Leaders can identify the level of engagement in their organizations and implement strategies to
facilitate full engagement and improve performance.
In the Lead: Cathy Lewis and Rob Devey, Prudential UK and Europe
Like other companies in the financial services industry, Prudential UK and Europe (Pru
UK) is operating in a highly turbulent environment that has been wracked further by the
global economic crisis and scandals in the financial industry.
Lewis, Pru UK CEO Rob Devey, and other top leaders decided to focus on improving
employee engagement and being seen as a great employer. The first step was a survey to
gather data on what employees themselves thought would make a difference. Leaders set
The engagement board wrote a six-chapter “story” examining the history of Pru UK, the
challenges it faces, the actions desired to address the challenges, and how employees fit in.
The story was delivered via multiple communication channels, including senior leaders
going to every location. Senior leaders have also begun writing weekly blogs, including
notes about people who have made significant contributions or received awards. The sense
of community has increased tremendously, with local offices planning events such as
Christmas fairs, family days, or special informational breakfasts.
New Leader Action Memo: As a leader, you can build an environment that unleashes
employee potential and allows people to become engaged with their work and the
organization. You can help people feel good about their jobs by giving them a sense of
making progress toward meaningful goals.
Discussion Question #8: Do you agree that it is the behavior of leaders that largely determines
employee engagement, as defined in the text? What might be some other factors that influence
engagement?
Notes_________________________________________________________________________
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Discussion Question #9: Discuss whether you believe it is a leader’s responsibility to help
people find meaning in their work. How might leaders do this for employees at a credit card call
center? How about for employees who empty waste containers and clean restrooms at sports or
entertainment venues?
Notes_________________________________________________________________________
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VI. New Ideas for Motivation
One reason engagement and empowerment have such high motivational potential is that they
address higher level needs and provide intrinsic rewards by applying some recent ideas about
what it takes to have a high-performance workplace in which people feel that they are a part of
something special.
A. The Making Progress Principle
