Multiple Theories Of Motivation In Organizational Behaviour Commerce Essay

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Although motivating employees is one of the most important challenges an organisation faces many managers are still to this day unaware of the difference motivated staff can have on performance. Learning and understanding the factors that encourage and increase motivation is therefore essential.

Whilst there are a number of motivation theories none has been universally accepted. The leading theories can be divided into two categories: Content theories on the one hand and process theories on the other. In this essay two leading theories, Maslow's hierarchy of needs and Adams' equity theory are examined as they represent the two main strands of theoretical development in the field of motivation.

To reinforce the importance of motivation to an organisation recent studies have demonstrated the existence of a direct link between employee motivation and financial performance. One study was undertaken by the Workplace Research Foundation and was titled "The National Benchmark Study: Employee Motivation Affects Subsequent Stock Price.". This comprehensive seven year study showed a direct correlation between staff motivation and a company's share price across a variety of economic conditions both positive and negative. (Serchuk, 2009)

The aforementioned study highlighted the importance of having a motivated workforce not only for the management but for all stakeholder groups and potential investors. Motivation has an effect on both productivity (quantity) as well as quality. We can see also that a lack of motivation can lead to missed production targets and compromised quality. Even in today's era of high technology the human resource is still the most important asset. It is an asset that performs best when in a motivated condition a fact that reaffirms motivation as a key area worthy of study.

At this stage we should consider a definition of motivation. It is essentially a 'force' that affects our actions, this force is generated when our individual needs are satisfied and as a result of it we are spurred to complete tasks more effectively. Our willingness to produce effort is directly linked to our level of motivation. In the workplace this means that our output will drop in both quality and quantity if your needs are not being met and our motivation is low as a consequence. According to Pinder, motivation consists of "a set of energetic forces that originate both within as well as beyond an individual's being, to initiate work related behavior, and to determine its form, direction and duration" (Pinder, 1984, p. 11). It is also described as "The cognitive decision-making process through which goal-directed behavior is initiated, directed and maintained (Huczynski & Buchanan, 1985, p. 242). Also, the concept of motivation is defined in motivational system theory as the organized patterning of an individual's personal goals, emotions and personal agency beliefs (Ford, 1992).

In this essay two leading theories, Maslow's hierarchy of needs and Adams' equity theory are examined as they represent the two main strands of theoretical development in the field of motivation.

Motivation and the Organisation

With a direct link established between the financial performance of a business and the motivation of the workforce both research and theoretical development have received substantial attention.

According to Motivation and Leadership at Work (Steers, Porter, & Bigley, 1996), at the start of the 20th Century researchers began investigating a range of possible explanations for the variations in individuals' motivation. They suggested that 'one of the most important impacts of organizational leadership, whether it be effective or ineffective, is on the motivation of organizational members (Steers et al. 1996 p618) so on this basis it is unsurprising that it has been an important area of research for over a century.

Researchers studied the affect of individuals' cognitive processes, including for example the thoughts they have about events in the future. Other researchers were more concerned with past behaviour and its consequences as the main driver of current behaviour. Another group focused on a set of internal factors or drives as the explanation for motivated behaviour.

As the body of research built up two main threads or classifications of research were established. These two theories are referred to as 'content theory' and 'process theory' of motivation and these remain today the two main schools of thought.

Content theories are mostly concerned with identifying the specific needs an individual at work has and the relative strength of these needs in producing motivation. They also refer to the strategies individuals adopt to satisfy their needs. On the other hand process theories are aimed at identifying the relationship between the dynamic variables of which motivation consists, as the name suggests this school of thought puts it emphasis on the actual process of motivation.

Content Theories:

There are four important theories of motivation falling under the content umbrella: Maslow's needs hierarchy, Alderfer's ERG theory, Herzberg's two-factor theory and McClelland's learned needs theory.

Maslow Hierarchy of Needs:

With what is probably the most influential of the content theories Maslow, a humanist psychologist, theorised that the basic needs that motivate people to behave in a given manner are situated in a hierarchy, this hierarchy is usually shown as a pyramid. The hierarchy categorises needs under the headings 'physiological', 'safety/security', 'love/belonging', 'esteem' and finally 'self actualisation'. The physiological needs are those most basic things required to sustain life; food, water and other survival needs. Security needs comprise of those needs that make one feel safe in the physical environment and free of emotional distress. A feeling of stability arises when these needs are met. Thirdly, belongingness needs are expressed in friendship and love and being accepted within a particular social group. Esteem arises when one has either self-respect or the respect of peers. Finally, self actualization refers to the achievement of personal potential, creativity and the feeling of being as good as you possibly can.

Maslow proposed that each need must be fulfilled in turn arguing that "A person who is lacking food, safety, love and esteem would most probably hunger for food more strongly than anything else." (Maslow, 1989). Only when the prior need in the hierarchy has been satisfied can the next step be fulfilled and once a need has been fulfilled it ceases to provide strong motivation.

Maslow's hierarchy of needs was not written with the workplace in mind but it has been adopted for this purpose by management theorists. It has taken on a considerable significance as an instrument enabling management to establish which types of rewards and incentives are likely to motivate particular employees. They can also use it to classify employees in terms of where they are in the hierarchy in other words what particular set of needs are important at that time. Additionally, Maslow allows for the fact that an employee's needs may change over time perhaps through changes to their personal circumstances such as marriage or parenthood. This suggests that management should periodically reassess the needs of each individual employee and needs to be considered as part of any successful staff appraisal process.

It is easy to see that Maslow's approach lends itself to use in the workplace as a management tool. Under the theory an employee must have their most basic needs met before considering higher levels. For example, it would be inappropriate to focus on public praise and recognition for an employee who feels they are inadequately paid or is in fear of losing their job. The use of this approach has had surprisingly little researched support and this has tended to undermine its usefulness in practical terms. What research there has been has sometimes led to the conclusion that it is not always possible to place individual motivational factors neatly into the five stages of the hierarchy.

Maslow's work is also criticized for its lack of differentiation between genders and that it in effect represents a hierarchy of male needs. (Wilson, 2003)

Process Theories:

According to process theories motivation is explained as being a result of rational cognitive processes. The principle work on the development of process theories has come from Vroom (1964), Kahler (1975) and firstly by Adams (1963).

Adam's Equity Theory:

Equity theory (where equity means fairness) was initially proposed by a behavioural psychologist John Stacey Adams in the 1960s. It holds that employees are motivated by self interest and are always looking to their perceptions of fairness (Adams, 1963).

The central element of 'equity theory' is that people at work respond to fair treatment and that the receiving of such treatment results in motivation which in turn incentivises the continuance of fairness. Under the theory, people are at their most satisfied when they have a feeling of 'give and take' with regard to relationships and this applies both inside and outside the workplace. This approach accounts for Equity theory being used as a starting point for research into personal relationships as well as the employer-employee relationship.

Adams argued that people strive to maintain equity between the inputs bring (skills, loyalty, experience, commitment, ability, adaptability, flexibility, tolerance, determination, effort, hard work) to a job and the outcomes (wages, salary, expenses, perks, rewards, benefits, pension arrangements, bonuses and commission) that they gain from it measured against the perceived inputs and outcomes of those around them in the organisation. They anticipate that management will reward others in the same way, so expect the ratios to be roughly equal. The formula below sums up the comparison process:


Person A compares the ratio of his/her input to his/her reward to that of B. If the ratios are similar then he or she will be satisfied with the received treatment. If he or she believes the ratio is lower than that of B then he or she will feel inequitably treated and be dissatisfied.

Equity is established when a person perceives that reward is in balance with input and that these rewards are equitably distributed among peers. In the absence of this perception a state of inequity exists such as when an employee feels that they are contributing more but receiving less in terms of reward than someone with whom they compare themselves.

The theory suggests that there are two causes of inequity: over-reward and under-reward. The latter happens when an individual perceives that they have received less reward than a peer for putting in the same effort or have put in greater effort and only received the same reward. The appearance of this perception can result in a stressed feeling and as a result the individual adopts particular strategies to remove this feeling and restore equity (Miner, 1985).

Under equity, perception is everything and is the main driver of behaviour. A manager's opinion of the equitability of any given circumstances is irrelevant if the employee perceives it otherwise. Rewards and incentives that are perceived as equitable are likely to bring positive results and increased motivation whilst the opposite would be true of inequitable ones that may generate dissatisfaction and lower performance levels. In practical terms there are four types of reaction to inequity: work inputs can be altered upward or downwards to balance rewards, ask for a pay rise of threaten legal steps, change their own personal perception of the situation or lastly, quit. (Certo, 1999)

The reaction to the feeling of inequity would vary from one person to another and according to the degree of inequity perceived. Reactions range from an inward disgruntlement for minor inequity to outward disruptive behaviour for greater inequities.

Managers should therefore take steps to make sure that the possible negative consequences of any reward structure are avoided or kept to a minimum. This is especially important when rewards are 'public' such as promotions or allocation of company cars. Careful communication is essential for managers at the time of setting and announcing rewards and the basis on which performance is appraised. This highlights the importance of tying rewards to measureable comparison points. Importantly and in common with Maslow's work equity spreads the net of motivational factors very wide and encourages managers to think beyond bare salary as being the only motivating factor. Praise, awards and recognition are included for study as much as the more financial aspects of reward; though equity theory does indeed show that the comparison of wages and salaries is one of the most common points of measurement.

Equity theory has been developed since Adams first proposed it most notably by Huseman et al. (1987) with their Equity sensitivity theory. The theory has been applied to organisations and groups beyond commercial businesses such as to students (Yamaguchi, 2003) and (Harmon & Foote, 2006) and cross cultural studies (Allen, Charles, & Takeda, 2005).

Adams original theory has been criticised on two levels. Firstly, on a theoretical level the assumption that all individuals seek a balance between inputs and outputs rather than allowing the possibility that an advantageous imbalance could be sought (Huseman, Hatfield, & Miles, 1987). Also that there has been limited practical application beyond the laboratory to support its findings. Overall Equity theory is seen as a rather simplistic one-size-fits all approach that underestimates the demographic and psychological variables that affect an individual's motivation. Having said this the importance of Adam's work as a significant stage in motivation theory development should not be dismissed.


In recent decades "[…] managers have been bombarded with a number of different approaches to motivation" (Nadler & Lawler III, 1989, p. 3). This is unsurprising having considered the earlier mentioned direct link between employee motivation and company profitability. In this essay two leading theories, one from the content approach and one process theory have been examined. Both theories have been accused of making erroneous assumptions. Principally that it is assumed that all employees are alike and will respond the same to a given set of circumstances. Additionally, that all organizational situations are alike and that management actions are the dame from one to another. Finally the 'one size fits all' approach to management solutions is also criticized (Nadler and Lawler III 1989, p.4).

Whilst the concept that an individuals are driven by and respond to 'wants' or 'needs' is generally accepted there is still considerable theoretical debate over the precise nature of motivation.

One of the main issues that faced managers after the first world war and face them now was ensuring that both men and women were motivated to turn out products of competitive price and quality. P109