The Challenges Faced In Employee Motivation Commerce Essay


One question that is frequently asked by managers in many organisations is "How do I motivate my emloyees?" The concept of motivation is complex with numerous researches carried out and various theories put forward in order to explain and attempt to understand it. Many definitions exist for motivation, but the common definition is that motivation is a pychological process within an individual that drives a certain behaviour to achieve set goals. Currently, motivation is a source of frequent debates and is an issue of great significance and concern for both employees and organisations. Whilst reliable information systems and the latest technology are important, in today's expanding service industry, employees remain the most precious assets in any organisation. How well employees perform and their commitment at work are crucial factors to the success of their organisation; and in today's modern work, where there is increasing competetion worldwide, organisations simply cannot afford to have a demotivated workforce or even lose good employees to poor motivation. Therefore, motivation of such employees is an essential role of any manager, yet it is also amongst the most challenging tasks to perform effectively. Managers must clearly understand and be aware of the sort of factors that define motivation of their workforce because, by doing this, they are able to focus employees' efforts to work efficiently and effectively to achieve desired goals of the business. Managers must also be aware of the fact that each employee is different and unique in their own sense, hence they need to take account of these variations when motivating them.

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According to the 'Self-Determination Theory' (2), a useful way to understand the concept of motivation is to divide it into extrinsic and intrinsic motivation. Extrinsic motivation relates to motivation coming from others and the environment, where the individual behaves in a certain way in order to get something (e.g. pay) or because of external pressures (e.g. manager's instruction). Intrinsic motivation, on the other hand, relates to motivation coming from within onself (3), where the individual acts in a certain way because of and actual interest in the act itself (e.g. satisfying need for competence). Frederick W. Taylor, the father of 'scientific management', had greatly influential views about motivation of workers. He believed that paying employees high wages, which is one of the sources of extrinisc motivation, was a sufficient incentive to motivate them to work harder and be more productive (find ref). This was possibly the case when organisations generally only sought compliance from their employees, and extrinsic rewards provided by managers were an easy answer to problems with staff motivation and ensuring they did their work and followed the rules properly . However, in today's world and in the modern workplace, where employees are expected to self-manage and have more responsiblities, issues with motivation have become much more complicated and demanding. Motivating staff is indeed a difficult taks and is normally easier said than done. Currently, many organisations are motivating their employees by using extrinsic motivators such as financial incentives. However, this is not always sufficient to maintain the right level of motivation, as it only satisfies them indirectly. For this reason, employers need to also pay attention to intrinsic motivators, which serve to satisfy the direct needs of the employee, and consequently encourage better performance on a particular task. Monetary incentives and other extrinsic rewards are no longer sufficient to maintain staff motivation since employees are now required to show more commitment and creativity (1) . This, in turn, would depend on deeper sources of satisfaction that are more meaningful to the employee that extrinsic rewards would generally fail to offer on their own. In today's work setting, intrinsic rewards have a vital part in staff motivation; these include psychological rewards such as recognition and a sense of appreciation, which provide employees with a greater incentive for higher productivity and achievement. For most, if not all employees, financial security is a strong motivator and will remain as such for a long time, but managers must be aware that it stops to be the only motivator at some point, and even could stop to be a motivator all together depending on an individual's circumstances and variations.

The different factors that can motivate the employee in the workplace can be expressed as needs which subsequently become motivators for greater productivity when they are fulfilled. Different things can motivate different people and be given different priorities. The manager must identify and then fulfill the needs for the employee, in order to form an environment in the workplace that encourages motivation. The various needs and expectations at work can be categorised into extrinsic and intrinsic motivation:

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Sense of challenge and achievement

Job security

Receiving appreciation


Positive recognition

Contract of service

Good treatment

Work environment

Growth and advancement

Social interaction


Health benefits

Extrinsic motivation relates to 'actual' rewards such as salary, security, promotion, contract of service and work environment; these are often outside the control of an individual manager; intrinsic motivation relates to 'psychological' rewards such as the sense of challenge and achievement, receiving appreciation, positive recognition and good treatment at work; these can usually be determined by the actions and behaviour of the individual manager(4). These sources of satisfaction differ from an individual to an individual and between different circumstances. They are interlinked, and therefore, cannot be isolated from one another, but must be used as a combination of motivators in an organisation.


For many decades, theorists have been trying to understand what motivates an individual to behave in a certain manner in the workplace. However, this is a subject that has seen many conflicting debates as some researches believed that individuals do not lack motivation but certain incentives that motivate them are missing, while others argue that motivation originates from within the individual regardless of the environment and other external influences (9). Theorists have researched the subject of motivation by addressing two main concepts. First is the content of motivation itself, which concerns factors within the individual and the work environment that define and shape certain motivated behaviour. Second is the process of motivation, which concerns the perceptive process that an indivdual has for motivation in a specific setting. This has led to the development of numerous content and process thoeries about motivation in the workplace.


In the 1940's Abraham Malsow, a psychologist, developed the concept of 'Hierarchy of Needs' (10), which later became one of the most popular and influential theories of motivation. He proposed that there are five levels of needs that existed in a specific order, and that each level must be satisfied in turn in order to motivate the individual to satisfy the need at the next level. His argument was based on the fact that Individuals always had the desire for more, and for an individual to be motivated to pursue the next step, the needs at the previous level have to be fully satisfied. Therefore, certain lower-order needs needed to be fulfilled before other higher-order needs became motivators for the individual. According to Maslow's model, these needs are physiological needs (basics for survival, e.g. food or water), safety needs (physical and emotinal safety), social needs (sense of love and social belonging), esteem needs (sense of recognition, respect and value) and self-actualisation (achieving one's full potential) (11).

(rbs full)

In the context of the workplace, there are potential ways that could satisfy an employee's needs:

Self-actualisation includes providing challenging tasks that would promote creativity and evolvement.

Esteem needs includes recognition, praise, social status, self-respect, delegating responsibility and accomplishment

Social needs involves social interaction, group work and pariticipation.

Safety needs include job security, financial savings and living safe working environment.

Physiological needs include providing adequate breaks during work and a salary that allows workers to afford life essentials (4).

There are a number of identified problems in applying Maslow's theory to the work place. In reality, other areas of life, beside work, can add to the individual's satisfaction, therefore the manager needs to also have knowledge of the employee's life outside work. Also, the fact that individuals are different means that they place different values on the same need; and that some rewards at work can satisfy more than one need, and not necessarily satisfy one need at a time (4). Additionally, it was criticised for having a rigid order of needs which possibly would not apply to everyone, because priorities are likely to vary in different individuals and even for the same individual over time (11). In spite of all these problems, Maslow's hierarchy of needs model has been widely utilised in many organisations as a guideline for managers to use to motivate their employees. It provides a valuable insight for managers about the general needs that individual employees have, and what can be used to motivate them (12).

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In 1972, Clayton Alderfer further developed Maslow's Hierarchy of Needs model by grouping the different levels of needs in the hierarchy into three sets in his ERG (Existence, Relatedness and Growth) theory. He placed the lower-order needs, physiological and safety, into 'existence needs'; social and esteem needs into the 'relatedness needs'; and finally, the self-actualisation need into 'growth needs'. In addition, Alderfer put forward a regression theory to accompany the ERG theory, which states that when higher-order needs are not met, the individual will work harder to satisfy the lower-order needs in order to increase their chances of fulfilling these higher needs (21). For instance, an employee who is having difficulties satisfying their sense of full potential would then probably put more effort into increasing their pay through promotion in order to maximize their chances of achieving what they want.


However, according to (11) a common problem with both Maslow and Alderfer's models of motivation is that they contain having descriptions of needs that are too vague, particularly safety and esteem needs, which would essentially cause difficulties to managers in interpreting them and using them to provide certain opportunities for motivating their employees.

In 1961, David McClelland created the 'Acquired Need Theory' which is based on three motivational needs including achievement, affiliation and power. He stated that all of the three needs are normally present in an individual to a certain degree, but only one of them usually dominates. This

is mix of motivational needs characterises a person's or manager's style and behaviour, both in terms of being motivated, and in the management and motivation others.

Another theorist, Elton Mayo, has made significant influences on the concepts of human relations and motivation, through conducting large studies of workers in an electrical company in the United States between 1924 - 1927. His findings emphasised the importance of teamwork, communication and positive recognition on staff motivation. His studies have also led to the creation of a model called 'The Hawthorne Effect' which shows that the degree of interest shown by the manager has a positive influence on an employee's job performance (5). However his model has been criticised for placing too much emphasis and reliance on social contacts within the organization on employees' job performance (6). Nevertheless, the impact of Mayo's research was huge, as it opened doors for further research into the subject of motivation by other theorists.

Frederick Hertzberg (1959) developed a 'two factor' theory based on findings from a study conducted in the U.S. through interviews with employees from different industries, in which they were asked about specific things that pleased or displeased them at their workplace. From this, Herzberg realised that there were two different sets of factors, where one set caused satisfaction and the other one caused dissatisfaction. One set of factors, called 'hygeine' or maintenance factors are concerned with the work environment; they do not result in higher level of motivation, but there absence would result in demotivation. These include extrinsic motivators such as salary, security and work environment. The second set of factors are the 'motivator' or growth factors which are concerned with content of the job itself; they result in increased motivation if present. These include intrinsic motivators such as positive recognition, challenge and a sense of achievement. His research also concluded that some factors overlapped both sets but had a stronger emphasis in one of them.


The size of the bars represent the degree of concern that each of the factors has on job motivation or dissatisfaction. The reason why the bars for achievement and pay look different is because they both offer short term satisfaction, as there is a continuous need to search for them to lead to satisfaction.

This theory has been frequently criticised by many researchers for its limited application and possibly biased methodology. However, continue from pg 266 on book

Furthermore, it has been noted the theory does not allow for individual differences, such as particular personality traits, which would affect individuals' unique responses to motivating or hygiene factors.[4]

The theories of motivation that were put forward more than half a century ago are still evident and widely utilised in today's banking industry. Based on Maslow's Hierarchy of Needs model, banks are constantly attempting to sustain a good level of motivation amongst their staff by understanding and fulfilling employees' needs. At the 'physiological and safety needs' levels of the hierarchy, basic needs such as food, shelter, warmth and safety are all provided by working in any bank through paying salaries and having a safe environment to work in. In terms of social and esteem needs, banks meet these by creating opportunities for employees to interact with each other and work in teams; in addition to good recognition of achievements through praising the employee or giving a bonus pay, both of which are only a few methods out of many more used by banks to give the employee a sense of value and appreciation. In terms of 'self-actualisation', banks meet this need by offering promotion opportunities to the employees, and giving them the chance to progress in their careers. The motivators that banks offer also cover the 'hygeine' and motivator factors that were put forward in Hertzberg's motivational model.

Expectancy theory is a general theory of motivation that is based on the concept that individuals are influenced by the perceived results of their actions. It argues that there are a number of inter-linking factors which determine the strength of an individual's motivation, such as the efforts expended, the expectation that rewards will be available, and that these rewards will be linked to their performance. In other words, the individual's level of motivation will depend on their perceived expectation that it will lead to the desired outcome. This theory has been approached by several different writers, namely Vroom, Porter and Lawler (HRM book). Vroom's expectancy theory is based on three factors:

Valence - the perceived gratification from a result.

Instrumentality - the degree to which a first level (performance-related) outcome, e.g. high productivity, leads to a second level (need-related) outcome, e.g. promotion.

Expectancy - the connection between a selected course of action and its expected outcome.

The combination of valence and expectancy defines the level of an individual's motivation. Vroom's theory has been further modified by Porter and Lawler, to develop which takes account other factors besides motivation that could influence performance. These factors include individual skills, characteristics and role perceptions. These theories help managers to understand the nature of human behaviour and the complexity of motivation in the work setting; in addition to helping them recognise any problems with individual performance. They emphasise that managers should pay particular attention to factors such as an employee's effort and performance, and use rewards whenever it is appropriate in order to maintain a good level of motivation amongst the employees; additionally, managers are advised to create methods of evaluating employee's performance as a way to ensure that their workforce are constantly motivated.

The Royal Bank of Scotland (RBS) offers its employees a package called 'Total Reward' (rbs full). Besides salary, this includes flexible working hours, health and medical benefits, lifestyle benefits such as shopping vouchers, and certain financial products at special rates. It also offers monetary incentives such as bonus payments based on profit-sharing and individual-performance schemes; in addition to non-monetary incentives through recognition of good performance based on personal development plans, where the employee is given the opportunity for promotion. RBS gives the employees the chance to work flexibly through a variety of working practices including job sharing, compressed hours and home-working. In 2004, RBS won an award for its flexible working-hours program in the workplace (find ref). This enabled employees to achieve a work-life balance by choosing working hours that fit around their personal lives, which would have a positive influence on the employee's commitment at the workplace, and in turn results in better overall performance. This was highlighted in Elton Mayo's studies on staff motivation in the 1920's that showed that staff tended to be more motivated and productive if they were feeling comfortable and satisfied with their work environment.

In 1963, John Adams developed the 'Equity theory' which is concerned with the employee's perception of fairness in the workplace, in terms of treatment received compared to co-workers on the basis of inputs and outcomes. He argued that fair treatment is highly valued by individuals, and the feeling of inequity may have a negative influence on their performance. There are a number of factors in the workplace that play an important role towards the feeling of equity including pay, promotion and recognition. Employees would expect equal treatment based on their contributions and performance compared to other co-workers. This would subsequently result in a sense of satisfaction and would strengthen their relationship with the organisation and the team of employees, all of which is important for their motivation.

Edwin Locke put forward a 'Goal theory' of motivation in the 1960's, which is based on the idea that individual's goals have a significant influence on their performance. He argued that individuals who have specific and challenging goals set for them, to which they are committed to, would generally perform better, as they provide focus and motivation for the employee on the task given. The performance of the employee is further enhanced if this is coupled with clear and constructive feedback of the results, which provides greater focus and gives the employee a greater sense of satisfaction and motivation for the tasks set.

In the 1960's Douglas McGregor's developed 'Theory X and Theory Y', which are theories that define two different approaches towards motivation in the workplace. Theory X implies an authoritarian management style, where the employee is often regarded as relatively unambitious, lacks responsibility, tends to avoid work and change, and is often in need for some kind of direction at work in order to perform and progress. So in order to achieve the organisation's goals, managers would adopt a stringent attitude towards the employee, in which they would often rely on threatening techniques of punishment to force the employee to comply with the organisation's goals. Based on Maslow's Hierarchy of Needs model, McGregor argued that most employees in this environment would only seek to satisfy their lower needs, such as money; however, since they are already satisfied they will not be a sufficient motivating tool for any longer. Therefore, this kind of management style would most definitely produce poor results in terms of staff motivation, and ultimately meeting the organisation's objectives. For this reason, McGregor put forward a Theory Y, which assumes a participative management style, where the employee is considered to be self-motivated, responsible, ambitious, and that they genuinely enjoy working. According to this theory, managers believe that employees are self-directed and motivated to perform well at work. This creates a work environment where managers are able to exercise delegation, collaboration and responsibility in decision making amongst their workforce. In this Theory Y environment, most employees are encouraged and driven to satisfy higher level of needs such as 'esteem' and 'self-actualisation', which are not fully satisfied and would therefore keep them motivated for higher performance and productivity at the workplace.


McGregor's model has been criticised for being too rigid and quite unrealistic in the way it depicts management and employees as being one of either two extremes in the workplace. Nevertheless, his theories continue to provide a guide to managers about the fundamentals of management styles, and the importance of maintaining a positive attitude to staff motivation, where employees feel that they are well-treated and valued as part of the of the organisation.