Chapter 7

Motivation Concept Rationale and Theories- Hierarchy of Needs Theory and Theory X and Theory Y

Motivation is the willingness to exert high levels of effort toward organisational goals conditioned bythe effortrsquos ability to satisfy some individual need While general motivation is concerned with efforttoward any goal wersquoll narrow the focus to organisational goals in order to reflect our singular interestin work-related behaviour The three key elements in our definition are effort organisational goals andneeds The effort element is a measure of intensity When someone is motivated he or she tries hardBut high levels of effort are unlikely to lead to favourable job-performance outcomes unless the effort ischanneled in a direction that benefits the organisation Therefore we must consider the quality of theeffort as well as its intensity Effort that is directed toward and consistent with the organisationrsquos goalsare the kind of effort that we should be seeking Finally we will treat motivation as a need-satisfyingprocess Here we summarise the major motivation theories and also considered the importance ofmoney as a tool for motivating employees 1 Behaviour Behaviour is generally motivated by desire to achieve a goal or satisfaction ofneeds People watch over from one activity to another activity As such managers mustunderstand the motives of the people working under them in order to predict and control theirbehaviour2 Motives Motives refer to needs or drives or wants Motives prompt people to action Motivesare largely subjective and represent the mental feelings of human beings They cause behaviourin many ways3 Goals Motives are directed towards achievement of goals Goals are the ends which providesatisfaction of human wants Attaining a goal will tend to restore physiological and psychologicalbalanceThe above model presents that individual process in varying host of needs desires and expectationsAll of such needs compete for their behaviour and ultimately the need with the maximum strength at aparticular moment leads to activity When a need is satisfied it is no longer a motivator of behaviourAccording to Gellerman the most subtle and most important characteristic of money is its poweras a symbol Its most obvious symbolic power is its market value It is what money can buy not moneyitself that gives it value But moneyrsquos symbolic power is not limited to its market value Since money hasno intrinsic meaning of its own it can symbolize almost any need an individual wants it to represent Inother words money can mean whatever people want it to meanTHE MOTIVATIONAL FRAMEWORKMotivation is the set of forces that leads people to behave in particular ways Motivation is important inorganizations because in conjunction with ability and environment it determines performance Thisframework provides a useful way to see how motivational processes occur When people experience aneed deficiency they seek ways to satisfy it which results in a choice of goal-directed behavioursAfter performing the behaviour the individual experiences rewards or punishments that affect the originalneed deficiency

HISTORICAL PERSPECTIVES ON MOTIVATIONHistorical views on motivation although not always accurate are of interests for several reasons Forone thing they provide a foundation for contemporary thinking about motivation an appreciation oftheir strengths and weaknesses can help managers gain useful insights into employee motivation in theworkplace One early view of motivation was based on the concept of hedonism the notion that peopleseek pleasure and comfort and avoid pain and discomfort Scientific management assumed that employeesare motivated by money The human relations approach to motivation suggested that favorable employeeattitudes result in motivation to work hard Need theories of motivation assume that need deficienciescause behaviour

CONTENT THEORIES OF MOTIVATIONMotivation theories can be divided into two approaches content and process Content (or static)

theories focus on internal or intrapersonal factors that energize direct sustain andor prohibit behavioursThese theories explain sources of motivation by focusing on individual needs Process theories on theother hand attempt to identify factors that motivate energize sustain and or stop behaviours Forexample process theories focus on expectations about effort and performance that affect motivationexpectancies and reinforcements goals and perceived equity We begin by explaining the content needtheories of Maslow Alderfer Herzberg and McClelland

Maslowrsquos Needs HierarchyItrsquos probably safe to say that the most well known theory of motivation is Abraham Maslowrsquoshierarchy of needs He hypothesized that within every human being there exists a hierarchy of fiveneeds These needs are 1 Physiological Includes hunger thirst shelter sex and other bodily needs2 Safety Includes security and protection from physical and emotional harm3 Social Includes affection belongingness acceptance and friendship4 Esteem Includes internal esteem factors such as self-respect autonomy and achievementand external esteem factors such as status recognition and attention5 Self-actualisation The drive to become what one is capable of becoming includes growthachieving onersquos potential and self-fulfillmentMaslowrsquos hierarchy of needs consists of five basic categories of needs This figure illustrates bothgeneral and organizational examples of each type of need Of course each individual has a wide varietyof specific needs within each category

Maslow separated the five needs into higher and lower orders Physiological and safety needs weedescribed as lower order and social esteem and self-actualisation as higher order needs The differentiationbetween the two orders was made on the premise that higher - order needs are satisfied internally(within the person) whereas lower - order needs are predominantly satisfied externally In fact thenatural conclusion to be drawn from Maslowrsquos classification is that in times of economic plenty almostall permanently employed workers have their lower - order needs substantially met Litter support wasfound for the prediction that needs structures are organised along the dimensions proposed by Maslowthat unsatisfied needs motivate or that a satisfied need activates movement to a new need level

Evaluation of Maslowrsquos TheoryThe research studies clearly made clear that Maslow is not the final answer in work motivationMaslowrsquos need hierarchy provides researchers and practitioners neither with a system that gives completeunderstanding nor one that is invariant in its application but it does provide a provocative template forthe appreciation of the question of why people act as they do or what is motivation Even in itsawkward form Maslowrsquos model seems to apply to underdeveloped countries A survey of 200 factoryworkers in India points out that they give top priority to lower level needs Other studies also reveal thatMaslowrsquos model applies to managers and professional employees in developed countries like the UKand the USA American philosophers reveal that human needs do not conform to a hierarchy assuggested by Maslow Hall and Nougaim found that as managers advance in an organization theirphysiological and safety needs tend to decrease in importance and their needs for affiliation esteemand self-actualization tend to increase Further Porterrsquos research indicates that managers at all levelshad similar security and social needs and that the three higher needs on the hierarchy developed byMaslow varied greatly with managerial ranks

MotivationmdashHygiene TheoryThe motivation-hygiene theory was proposed by psychologist Frederick Herzberg In the belief that anindividualrsquos relation to his or her work is a basic one and that his or her attitude toward this work can very welldetermine the individualrsquos success or failure Herzberg investigated the question ldquoWhat do people want fromtheir jobs He asked people to describe in detail situations when they felt exceptionally good and bad abouttheir jobs From the categorized responses Herzberg concluded that the replies people gave when they feltgood about their jobs were significantly different from the replies given when they felt badFigure given below Shows motivation and hygiene factors

One might generalize at this point that individualrsquos act on the basis of their perceptions or interpretationof reality and not on the basis of reality itself In fact one of the reasons we study the behaviouralsciences is that they give us ways to get our perceptions closer and closer to reality The closer we getour perceptions to a given reality the higher the probability that we can have some impact on thatparticular piece of reality Therefore by bringing their perceptions closer and closer to realitymdashwhattheir people really wantmdashmanagers can often increase their effectiveness in working with employeesAccording to Herzberg the factors leading to job satisfaction are separate and distinct from thosethat lead to job dissatisfaction Therefore managers who seek to eliminate factors that create jobdissatisfaction can bring about peace but not necessarily motivation They will be placating their workforce rather than motivating them As a result such characteristics as company policy and administrationsupervision interpersonal relations working conditions and salary have been characterized by Herzbergas hygiene factors When they are adequate people will not be dissatisfied however neither will they besatisfied If we want to motivate people on their jobs Herzberg suggests emphasizing achievementrecognition the work itself responsibility and growth These are the characteristics that people findintrinsically rewarding

(a) Herzberg Versus Maslow Herzberg reduced Maslowrsquos five need levels into two distinctlevels of analysis The hygiene factors or dissatisfiers are analogous to Maslowrsquos lower-level needssuch as physiological safety and social They are essentially preventive factors that serve to reducedissatisfaction The absence of hygiene factors from the workplace leads to high levels of dissatisfactiontheir presence creates a state of lsquozero dissatisfactionrsquo or neutrality By themselves hygiene factors donot motivate individuals to better performanceThe motivators or satisfiers are equivalent to Maslowrsquos higher level needs These are the jobcontentfactors that motivate people to perform According to Herzberg only such factors as a challengingjob recognition for doing a good job and opportunities for advancement personal growth and developmentfoster motivated behaviour(b) Evaluation of Two-Factor Theory Herzberg made a valuable contribution to the knowledge

and understanding of the nature of job satisfaction His theory was welcomed by managers because itmaintained that money is not a true motivator The great value of his work relied emphasis on recognitionopportunity for advancement and other factors for motivating people Although his theory was anextension of Maslowrsquos need-based theory it provided new look to the question of how to get employeesto perform in a more better way

Theory X and Theory YDouglas McGregor proposed two distinct views of human beings one basically negative labeledTheory X and the other basically positive labeled Theory Y After viewing the way in which managersdealt with employees McGregor concluded that a managerrsquos view of the nature of human beings is basedon a certain grouping of assumptions and that he or she tends to mold his or her behaviour towardsubordinates according to these assumptions as mentioned earlier in chapter1 In contrast to these negativeviews about the nature of human beings McGregor listed the four positive assumptions as describedearlier in chapter 1 that he called Theory YWhat are the motivational implications if you accept McGregorrsquosanalysis The answer is best expressed in the framework presented by Maslow Theory X assumes thatlower-order needs dominate individuals McGregor himself held to the belief that Theory Y assumptionswere more valid than Theory X Therefore he proposed such ideas as participative decision makingresponsible and challenging jobs and good group relations as approaches that would maximise an employeersquosjob motivation Unfortunately there is no evidence to confirm that either set of assumptions is valid or thataccepting Theory Y assumptions and altering onersquos actions accordingly will lead to more motivated workers

ERG TheoryClayton Alderfer of Yale University has reworked Maslowrsquos need hierarchy to align it more closelywith the empirical research His revised need hierarchy is labeled ERG theory Alderfer argues that thereare groups of core needmdashexistence relatedness and growthmdashhence the label ERG theory The existencegroup is concerned with providing our basic material existence requirements They include the itemsthat Maslow considered to be physiological and safety needs The second groups of needs are those ofrelatednessmdashthe desire we have for maintaining important interpersonal relationships These social andstatus desires require interaction with others if they are to be satisfied and they align with Maslowrsquossocial need and the external component of Maslowrsquos esteem classification Finally Alderfer isolatesgrowth needsmdashan intrinsic desire for personal development These include the intrinsic componentfrom Maslowrsquos esteem category and the characteristics included under self-actualisation

The ERG theory demonstrates that (1) more than one need may be operative at the same time andif the gratification of a higher - level need is stifled the desire to satisfy a lower - level need increasesERG theory also contains a frustration - regression dimension Maslow yoursquoll remember argued that anindividual would stay at a certain need level until that need was satisfied ERG theory counters by notingthat when a higher - order need level is frustrated the individualrsquos desire to increase a lower level needtakes place Inability to satisfy a need for social interaction for instance might increase the desire formore money or better working conditions So frustration chanced to a regression to a lower need ERGtheory is more consistent with our knowledge of individual differences among people Variables such aseducation family background and cultural environment can alter the importance or driving force that agroup of needs holds for a particular individual The evidence demonstrating that people in other culturesrank the need categories differently - for instance natives of Spain and Japan place social needs beforetheir physiological requirements would be consistent with ERG theory

McClellandrsquos Theory of NeedsMcClellandrsquos Theory of Needs was developed by David McClelland and his associates Thetheory focuses on three needs achievement power and affiliation They are defined as follows Needs for achievement The drive to excel to achieve in relation to a set of standards tostrive to succeedNeed for power The need to make others behave in a way that they would nothave behaved otherwise and

Need for affiliation The desire for friendly and close interpersonal relationshipsSome people have a compelling drive to succeed Theyrsquore striving for personal achievement ratherthan the rewards of success per se They have a desire to do something better or more efficiently thanit has been done before This drive is the achievement need From research into the achievement needMcClelland found that high achievers differentiate themselves from others by their desire to do thingsbetter They seek situations where they attain personal responsibility for finding solutions to problemswhere they can receive rapid feedback on their performance so they can tell easily whether they areimproving or not and where they can set moderately challenging goals High achievers are not gamblersthey dislike succeeding by chance They prefer the challenge of working at a problem and accepting thepersonal responsibility for success or failure rather than leaving the outcome to chance or the actions ofothers Importantly they avoid what they perceive to be very easy or very difficult tasks They want toovercome obstacles but they want to feel that their success is due to their own actions This meansthey like tasks of intermediate difficulty

Content Theories in PerspectiveThe five content theories of motivation we have discussed are summarized in Table Takentogether these theories challenge leaders managers and organizational members to the following_ Gain an understanding of their own needs and the needs of those with whom they work andmanagethe nature of the work_ Create learning environments that motivate the needs of individuals and terms to performmore effectively and with qualitySome of the commonalities of the four theories include a recognition of the role that human needsplay in organization satisfaction performance and growth and the distinction between lower-and higherlevelneeds Higher-level needs for Maslow include self-actualization esteem and belonging for Alderferthey are growth and relatedness for Herzberg motivational factors and for McClelland they areachievement and power There are important distinctions in the four theories Maslow held to a hierarchyof five needs Alderfer constructed a hierarchy of three needs with much more flexibility Herzberg usedtwo factors that did and did not motivate employees (eg dissatisfies) McClelland found that threeneeds common to all cultures he viewed all people as learned and capable of being taught Most of thesetheories lack sufficient empirical validation especially from a cross-cultural perspective but they are astarting point for discussing the role of human needs and motivation in the work place They can also beused to discover the effects of organizational change on individualrsquos needs and motivations Managerscan use the vocabulary and concepts of the content theories in employee interviews and dialogues toidentify development and training areas in which employee motivation can be improved

PROCESS THEORIES OF MOTIVATIONProcess theories use external variable to identify individual sources of motivation Whereas contenttheories deal with intrapersonal internal sources (ie needs) for motivation process theories includeperceived and actual exogenous workplace dimensions For example performance goals and tasksLearning Theory and MotivationLearning is an integral part of motivation for several reasons First expectations needs and responsesthat are motivating and demotivating are learned (or not learned) Understanding how we learn can assistorganization leaders and members in diagnosing motivational levels and finding ways to enhance themsecond since rewards and punishments are a vital part of human motivation understanding how peoplelearn to respond to rewards and punishments can assist organization leaders and managers in allocatingrewards more effectively Finally learning has taken on added importance in the process of ldquocontinuousimprovementrdquo Influenced by the Japanese concept of Kaizen (translated as ldquocontinuous improvementrdquo)which focuses not on ldquoquick fixesrdquo to problems or opportunities but on transformational incrementaland organization wide learning processes that enhance product and service quality many successfulcorporations practice Kaizen Learning how we learn is important to enable self-improvement(a) Behaviour Modification The basic tenet in the behaviour modification approach to learningis that to effect change behaviours must be addressed rather than their psychological inferences orcauses Behavioural modification specialists therefore approach human problems in organizational by

focussing on specific behaviours A five-step behavioural modification model addresses change asfollows Motivation 971 Identify and define specific behaviour (s) Can these be seen Can they be measured 2 Establish a baseline Before attempting to change the behaviour determine its strength in thepresent by measuring or counting the occurrences of the behaviour3 Analyze the A-BCs (antecedents behaviours consequences) of the behaviour to determinethe source of the problem4 Develop and implement an action plan using operant conditioning strengthen the desirablebehaviours and weaken or extinguish the undesirable one through conditioning techniques5 Evaluate the effects of the change using different measurements(b) Cognitive Evaluation Theory The introduction of extrinsic rewards such as pay For workeffort that had been previously intrinsically rewarding due to the pleasure associated with the content ofthe work itself would tend to decrease the overall level of motivation This proposal which has come tobe called the cognitive evaluation theory has been extensively researched and a large number ofstudies have been supportive Historically motivation theorists have generally assumed that intrinsicmotivations such as achievement responsibility and competence are independent of extrinsic motivatorslike high pay Promotions good supervisor relations and pleasant working conditions That is thestimulation of one would not affect the other But the cognitive evaluation theory suggests otherwise Itargues that when extrinsic rewards which are derived from individuals doing what they like are reducedIn other words when extrinsic rewards are given to someone for performing an interesting task itcauses intrinsic interest in the task itself to decline The theory may have limited applicability to workorganisations because most low-level jobs are not inherently satisfying enough to foster high intrinsicinterest and many managerial and professional positions offer intrinsic rewards Cognitive evaluationtheory may be relevant to that set of organisational jobs that falls in between - those that are neitherextremely dull nor extremely interesting(c) Goal-Setting Theory Gene Broadwater coach of the Hamilton High School Cross-countryteam gave his squad these last words before they approached the line for the league championship raceldquoEach one of you is physically ready Now get out there and do your best No one can ever ask more ofyou than thatrdquo In the late 1960s Edwin Locke proposed that intentions to work toward a goal are amajor source of work motivation That is goals tell an employee what needs to be done and how mucheffort will need to be expended The evidence strongly supports the value of goals More to the pointwe can say that specific goals increase performance that difficult goals when accepted result in higherperformance than do easy goals and that feedback leads to higher performance than does non-feedbackSpecific hard goals produce a higher level of output than does the generalized goal of ldquodo your bestrdquoThe specificity of the goal itself acts as an internal stimulus If factors like ability and acceptance of thegoals are held constant we can also state that the more difficult the goal the higher the level ofperformance However itrsquos logical to assume that easier goals are more likely to be accepted But oncean employee accepts a hard task he or she will exert a high level of effort until it is achieved loweredor abandoned(d) Reinforcement Theory A counterpoint to goal - setting theory is reinforcement theoryThe former is a cognitive approach proposing that and individualrsquos purposes direct his or her action Inreinforcement theory we have a behaviouristic approach which argues that reinforcement conditionsbehaviour Reinforcement theory ignores the inner state of the individual and concentrates solely onwhat happens to a person when he or she takes some action Because it does not concern itself withwhat initiates behaviour it is not strictly speaking a theory of motivation But it does provide a powerfulmeans of analysis of what controls behaviour and it is for this reason that it is typically considered indiscussions of motivation Employees might compare themselves to friends neighbours co-workerscolleagues in other organisations or past jobs they themselves have had Which referent an employeechooses will be influenced by the information the employee holds about referents as well as by theattractiveness of the referent This has led to focusing on four moderating variables - gender length oftenure level in the organisation and amount of education or professionalism Research shows that bothmen and women prefer same sex comparisons Based on equity theory when employees perceive an

inequity they can be presented to make one of six choices(e) Expectancy Theory Currently one of the most widely accepted explanations of motivation isVictor Vroomrsquos expectancy theory The theory therefore focuses on three relationships The strengthof a tendency to act in a certain way depends on the strength of an expectation that the act will befollowed by a given outcome and on the attractiveness of that outcome to the individual_ Effort-performance relationship The probability perceived by the individual that exerting agiven amount of effort would lead to performance_ Performance-reward relationship The degree to which the individual believes that performingat a particular level will lead to the attainment of a desired outcome_ Rewards-personal goals relationship The degree to which organisational rewards satisfy anindividualrsquos personal goals or needs and the attractiveness of those potential rewards for theindividual(f) The Porter-Lawler Model The Porter and Lawler expectancy model provides interestinginsights into the relationships between satisfaction and performance As illustrated here this modelpredicts that satisfaction is determined by the perceived equity of intrinsic and extrinsic rewards forperformance That is rather than satisfaction causing performance which many people might predictthis model argues that it is actually performance that eventually leads to satisfaction_ Determine the primary outcomes each employee wants_ Decide what levels and kinds of performance are needed to meet organizational goals_ Make sure the desired levels of performance are possible_ Link desired outcomes and desired performance_ Analyze the situation for conflicting expectancies_ Make sure the rewards are large enough_ Make sure the overall system is equitable for everyone(g) Equity Theory Equity theory recognizes that individuals are concerned not only with theabsolute amount of rewards they receive for their efforts but also with the relationship of this amountto what others receive The make judgements as to the relationship between their inputs and outcomesand the inputs and outcomes of others Based on onersquos inputs such as effort experience educationand competence one compares outcomes such as salary levels raises recognition and other factorsWhen people perceive an imbalance in their outcome-input ratio relative to others tension is createdThis tension provides the basis for motivation as people strive for what they perceive as equity andfairness Specifically the theory establishes four propositions relating to inequitable pay 1 Given payment by time over rewarded employees will produce more than will equitably paidemployees2 Given payment by quantity of production over rewarded employees will produce fewer buthigher quality units than will equitably paid employeesMotivation 993 Given payment by time under rewarded employees will produce less or poorer quality ofoutput4 Given payment by quantity of production under rewarded employees will produce a largenumber of low-quality units in comparison with equitably paid employeesIn conclusion equity theory demonstrates that for most employees motivation is influencedsignificantly by relative rewards as well as by absolute rewards but some key issues are still unclearFor instance how do employees handle conflicting equity signals such as when unions point to otheremployee groups who are substantially better off while management argues how much things haveimproved Yet regardless of these problems equity theory continues to offer us some importantinsights into employee motivation

MANAGING MOTIVATION AND CHANGEThe scope radical nature and fast rate of planned organizational change as as stated earlier beenunprecedented in recent times Mergers acquisitions strategic alliances reengineering and downsizingactivities have significantly taken off The extent to which these levels of organizational change willcontinue is uncertain however it has been predicated that organizational change will become a constantthat

is change will no longer be a single event Because information technologies are also changing thevery nature of work and expertise requirements employee motivation takes on an even greater importanceSeveral practices to enhance motivation in the contemporary workplace have been suggested _ Ensure that employeesrsquo motives and values are appropriate and ldquofitrdquo the jobs on which theyare placed_ Ensure that jobs roles and responsibilities are attractive and consistent with employeesrsquovalues beliefs and motives_ Assist employees and ensure that work goals are clear challenging attractive and attainable_ Provide employees with required personal and material resources that enhance theireffectiveness_ Create and sustain supportive social and working environments_ Recognize and reinforce performance and_ Ensure that the elements are harmonized and fit into a consistent sociotechnical organizationalsystemManaging motivation in rapidly and continuously changing organizational settings will requireflexibility focus experimentation the skill of balancing paradoxes openly communicating and testingassumptions and being open to and skilled in implementing planned change Motivation is to a largeextent culturally conditioned and learned Individual organization members working with those fromdifferent cultures should not assume when the topic is motivations whether it be needs expectanciesor satisfiers These individuals should find out what the basic cultural orientation is - whether it iscollectivist individuals productivity or quality of life oriented uncertainty avoidance or comfort withambiguity Not everyone from a culture shares all of its basic societal values but these values can and doinfluence unspoken beliefs attitudes and motivations A personrsquos own values or motivational assumptionand standards should not be accepted as absoluteThe characteristics of a changing ever-more diverse workforce suggests that managing motivationwill be challenging and difficult The challenge for owners managers and organization members will beto find ways to integrate not assimilate the diverse individuals and to address their motivational needsIntegrating and motivating a diverse workforce involves understanding and addressing value differencesValuing and motivating diverse workforces must be organizational priorities The scope radical natureand fast rate of planned organizational change in recent times have been unprecedented Several practiceshave been suggested to enhance motivation in the contemporary workplace These include ensuring thatemployeersquo motives and values are appropriate and fit the jobs in which they are placed that jobs rolesand responsibilities are attractive and consistent with employeesrsquo values beliefs and motives and thatwork goals are clear challenging attractive and attainable Other ways to enhance motivation includeproviding employees with required personal and material resources that enhance their effectivenesscreating and sustaining supportive social and working environments recognizing and reinforcingperformance and ensuring that these elements are harmonized and fit into a consistent socio-technicalorganizational system Managing motivation in rapidly and continuously changing organizational settingswill require flexibility focus experimentation the skill of balancing paradoxes openly communicatingand testing assumptions and being open to and skilled in implementing planned change MONEY AS A MOTIVATORThe widespread misconception about finance being a motivating factor or motivator in industry has ledto the failure of the best-laid incentive plans The Wire Meld company USA after a six week drive thecompany concluded that awarding war bonds to employees for perfect attendance was not the solutionto absenteeism Habits of the employees were not influenced by the plan Most of those who had beenirregular in attendance before the award system was inaugurated were irregular There was a bus slowdown in New York in it easy 1980rsquos due to the refusal of drivers (bus) to work overtime They were notinterested in more money They felt they were tired after duty to engage in extra work An analysis ofthese drivers indicated an average income of 3200 a year an income that even then could not beconsidered very highEver since Taylorrsquos time ldquoexpertsrdquo have concocted one wage incentive system after anotherresulting in a myriad of these Lytle (1938) gave one of the most comprehensive reviews of wageincentive plans He believed such plans were important in any cost production problem He cited two

advantages of wage incentive plans as being (1) an increase in production per unit (2) an increase inemployeesrsquo earnings He believed that the advantages of a well-installed and ably managed wage paymentplan accrue annually to employees and employers It is then difficult to demarcate (among) the variousincentive systems from the industrial psychologists point of view Lytlersquos attempt to classify all financialincentive plans on the basis of production earning characteristics is shown below Itrsquos an idea of thenumerous systems that have been promoted This is a historical method and is least used todayClass I Employee takes all gain or lossTime Hour week or any straight statuary rate not an extra incentiveStandard time using two rates one either side of the task a two zone multipletime planMultiple time With Arithmetic in rate between production zones (standard time plan)Multiple time Geometric steps in rate between production zonesClass II Employee takes all gainPiece or straight commission rate this sub divides into punitive basic andhigh etcClass III Gain shared between employer and employee but day wage guaranteedexception one-third premiumClass IV Empirical location of points between two variables piecework or commissionabove 100 productionMotivation 101Theories Concerning Money as an InentiveOpsahl and Dunnettee (1966) list 5 theories in this respect These attempt to explain the effect ormoney or job performancea Money as a generalised conditioned Reinforcer Money due to its association with morebasic reinforcers (need satisfiers) acquires the status of a secondary reinforcer Wolf studies (1936) andCowles (1937) demonstrated that poker chips acquired requirements value when they could be exchangedfor food ie subjects in their experiments worked as hard to get clops which could lsquobuyrsquo food as theyhad previously worked for food itselfb Money as a conditioning incentive Money acquires an incentive value due to continuedpairing with other incentives of a more basic nature Despite laboratory data this method is difficult topractice It is difficult to point out the more basic incentives with which money can be pairedc Money as an anxiety reducer The absence of money is generally associated with anxietyreactions in our society Therefore lack of money becomes a conditioned stimulus for an anxiety responseMoney therefore serves as a reducer of anxietyd Money as a ldquoHygiene Factorrdquo Herzberg Mausner and Synderman in their notion of satisfierand dissatisfies are viewed as being two distinct classes of motivators ldquoMoney is a hygiene factorwhich serves primarily as a dissatisfier ie causes dissatisfaction when absent but contributes a little tosatisfaction when present It is uncertain whether their data supports this hypothesis (Opsahl and Dunnette1966)e Money as a means of Instrumentality According to Vroomrsquos Theory of Motivation Modelmoney acquires valence due to its perceived instrumentality for obtaining the desired outcomes eg Ifmoney were perceived as being instrumental to the positive goal of security then money would acquirea positive valance Then the likelihood of a person acting in a way to acquire money would be a functionof his need for security multiplied by the expectancy that a particular money-seeking act would result ina specified monetary return A simple numerical explanation would beLm = f (s) times EwhereLm = Likelihood of a person acting in a way to acquire moneyS = Need for securityE = Expectancy that a particular money seeking act would result in a specifiedmonetary returnIn their review on the role of financial compensation in industrial motivation (Opsahl and Dunnette1966) state The role of money as reward in modern industry continues to be poorly understood despite

our economies being based on a monetary reward system Although the use of formal incentive paysystems has diminished in recent years in favour of other non-financial incentives money units willprobably always be exchanged for work Thus a better knowledge of the dynamics of this exchangeprocess is certainly neededKinds of IncentivesIncentives may be classified financial and non-financial More aptly co-operative and competitive(i) Co-operation Incentives This involves organising people into groups (meaningful groups)and having them work together for a common goal This is the latest of kinds of incentivesand is practiced in industry as well as educational institutions This results in more learning atthe educational level and greater production at the industrial level People contribute equal andmaximum efforts towards the realisation of common goal102 (ii) Competitive Incentives These involve the urge of doing better than the next individual(iii) Individual IncentivesThese are extremely meaningful if the individual himself introducesthem In industry the incentive is used as a means of spurring an employee towards someoneelsersquos goal He may not be interested in either reduced costs or increased production But hemay be persuaded to achieve his goal by an incentive when the incentive results in equalsatisfaction for the employer too when the plant is being successfully operated The majordifficulty with financial incentives has been the facts that fear of a rate cut-whether the fear isjustified or not They also fear a lay off Hence indifference or evasiveness to wage raisesBoth competition and co-operation are not mutually inclusive especially when individuals cooperatein-groups to compete with other groups Industry in the past has placed too much emphasis oncompetition only recently have the advantages of co-operative behaviour as an incentive been recognisedThe use of co-operation as an incentive holds considerable promise of successResearch on IncentivesA host of experts have attempted in divulge into the issue of incentives and it is conspicuous thateach one of them has endeavored to surpass their predecessor or rather improve on the previousstudies(a) Blum and Ruess Study In this study 5 drives were listed in an attempt to determine therelative importance of these five incentives on an employee in a job The data were obtained from 286gainfully employed people from 17-60 years of age and in occupation from unskilled manual labour tothe professionals there were 181 men 72 of whom were married and 105 women 26 of whom weremarried all subjects lived in New York city area A questionnaire was prepared aimed at comparing theemployeesrsquo incentive with the other four in all 10 comparisons Each time one incentive is compared tothe other in the comparison a score is assigned to it ie a maximum of ten points is distributed amongthe five incentives Then the scores were tabulated thus against the five incentives the purpose of thequestionnaire was not disclosed to the subject till after completing itFindingsIn this study they have measured the attitudes of employees toward time incentives at the paidtechnique it was found that_ Advancement and security were the most important_ Incentives hours of work were the least important_ Salary was rated third by men 4th women_ Supervisor relationships were ranked fourth by men and third by women_ Married men considered security more important and advancement less important than didsingle men_ Married women were more interested in working fewer hours than were the single women_ The significance of advancement as an incentive decreased with age for both sexes andsecurity became more important with age_ Advancement and security were considered more important than salary and_ The attitudes of the employees changed depending on such major classifications as sex maritalstatus and ageMotivation 103

(b) Jurgensen Study His study involved 150 females and 1189 male applicants for positions atthe Minnea Polis Gas Light Company Each subject was asked to rank ten items in order of preferenceFindingsJob Preferences were affected by the extent of Education than by most other variablesAdvancement became more important and security less important as education increasedAccording to his findings wages hours and working conditions are not so important as generallythought and the type of work is more important than is ordinarily stated(c) Stagner Study The study included 7000 employees of a Nationwide Corporation After viewingvarious researchers he concludes that neither executives nor workers are concerned about pay as suchexcept when economically pinched At other times they prefer ego-satisfactions such as prestigerecognition and individual treatment He rated the importance by 7000 workers on various job factors(d) Jones and Jeffrey Study This is a study which evaluated preferences among electricalworkers for alternate form of job compensation They considered each of four different compensationdimensions listed belowHourly wage versus weekly wageMerit incentive versus non-merit incentivePiecework incentive versus no piecework incentive andRegular pay rate versus high pay rateFindingsNon-union workers significantly preferred the weekly wage the merit incentive the pieceworkincentive and the higher wage Union Members were willing to take jobs with non-merit incentive andregular pay in preference to jobs having merit incentives with higher pay They would forfeit money tostay clear of a merit system This would certainly seem to argue that the union as an organisationprovides the workers with some form of ldquogroup protectionrdquo or security that is worth a sacrifice inactual money units He no longer has to bargain for himself but is part of a larger body which bargainsin much broader terms(e) Nealey Study He examined work preference for different employee benefit programmes Hehad 1133 members of an electrical trade union panel compare the following six-benefit option1 The company will pay the cost of an additional 50 a month pension to be added to retirementbenefit2 I will get a percent raise3 The normal workweek shall be cut to 375 hrs Without any reduction in weekly earnings4 The company will pay the entire costs of full medical insurance for my family and myself5 It will be agreed that all regular employees must be members of the union and6 I will have three weeks paid vacation in a year in addition to my present vacation to the extravacation to be taken when I chooseThe six plans were chosen so as to be of approximately equal cost to the employerIn general the workers preferred medical insurance option and the union were unimpressed withthe enticement of 375 hours week104 Major FindingsThere is a tremendous increase in preference for the pension plan as one moves into older age groupsThe union is judged the most desirable (relative to other plans) among the middle-aged workersThe 3-week additional vacation was most preferred on a move through the older groups(f) DudychandashNaylor Study (1966) The study was designed to examine what job characteristicswere of primary importance to todayrsquos college studentsFindingsStudents in their sample gave the following order of job traits1 Pay2 Opportunity for growth and advancement3 Security4 Fellow employees5 Working conditions and

6 Supervisor-employee relationsThese were students who for most part had never held regular job and who were indicating whatthings they felt would be important when they did start choosing between job opportunities Theyplaced high weight to pay(g) Maslowrsquos View on Financial Incentives Maslowrsquos theory of motivation dismisses financeas a motivator He argued that money satisfies only lower needs (safety and psychological needs) let thehigher order needIn one survey he found that when managers were asked what factors they felt determined theirpay they responded training and experience were the most important factors

Theory X and Theory Y Douglas McGregor (1960)Douglas McGregor and MIT psychologist proposed two sets of assumptions about humanmotivation that a manager can hold McGregor called the assumptions Theory X and Theory Y Amanagerrsquos behaviour toward his workers and his management style will differ based on the assumptionsguiding his behaviour10487661048766The average person dislikes working and will avoid it if possible10487661048766Because people dislike working they must be directed tightly controlled and pressured to getthem to work toward organizational goals10487661048766The average person wants security avoids responsibility and has little ambition and10487661048766McGregor believed that many managers held Theory X assumption about workers Suchmanagers give their workers little latitude closely supervise them and punish poor performanceThey use few rewards and typically give only negative feedbackThe Theory Y assumptions are as follows10487661048766The average person does not dislike work it is as natural as play10487661048766If a person is committed to a set he will work towards them without an external control10487661048766Goal commitment follows from the satisfaction of a personrsquos desire to achieve10487661048766The average person can learn to accept responsibility Lack of ambition is not a basic humancharacteristic10487661048766Creativity ingenuity and imagination are human characteristics that are widely dispersed inthe population and10487661048766Modern organizations only partially use and tap the potentialities of its workersManagers who hold Theory Y assumptions have a positive view of people believe they have muchhidden potential and that people will work toward organizational goals These managers will give workersmore job responsibility and reply on self-motivation more than coercion These two sets of differentassumptions reigned in the academic literature for many years They were widely understood by practicingmanagers Although called a theory they are not theories as described earlier They are assumptions orbeliefs about human motivation that can strongly affect management behaviourThe Twentieth Centuryrsquos Management Guru Peter F Drucker (1995)Austrian born Peter F Drucker ranks among the most widely read and widely quoted managementscholars of the twentieth century Drucker is a professor of management a Claremont College in Californiaa post he has held since 1971 He has written almost 30 books and continued his writing activity into thelate 1990s His 1954 book The Practice of Management launched him as a significant managementwriter Among his most lasting observations was his proposed philosophy of management by objectivesand self-control General Electric was the first company to adopt management by objectives (MBO) andput it into practice with Druckerrsquos help as a consultant Drucker has an insatiable appetite for statisticsHe examines them for a pattern often finds pattern that others miss Here are his predictions for eventsunfolding until about 201010487661048766A rise in alliance partnership and joint ventures on a global scale Technology will help linkthese parts of an emerging ldquoNetwork Societyrdquo10487661048766A compelling need for decentralized organizations in an increasing uncertain environment10487661048766A related increased in the use of teams in organizationsOverview of Organization Behaviour in the New Millennium 15

10487661048766An increase in the number of knowledge workers (for example computer technologists andmedical workers) and continual decline in the number of blue-collar and agricultural workersin all developed free-marked countries The knowledge workers will need continuous learninga characteristic with implications for educational systems10487661048766The twenty-first century will see the evolution of knowledge societies in developed countriesThese societies will have three sectors Business government and nonprofit The last is newand helps peoplersquos social development Nonprofit volunteer activities will characterize Englishspeakingcountries but appear fewer elsewhere and10487661048766An unquestionable forming of a world economy in which world markets will become moreimportant than domestic markets

theories focus on internal or intrapersonal factors that energize direct sustain andor prohibit behavioursThese theories explain sources of motivation by focusing on individual needs Process theories on theother hand attempt to identify factors that motivate energize sustain and or stop behaviours Forexample process theories focus on expectations about effort and performance that affect motivationexpectancies and reinforcements goals and perceived equity We begin by explaining the content needtheories of Maslow Alderfer Herzberg and McClelland

Maslowrsquos Needs HierarchyItrsquos probably safe to say that the most well known theory of motivation is Abraham Maslowrsquoshierarchy of needs He hypothesized that within every human being there exists a hierarchy of fiveneeds These needs are 1 Physiological Includes hunger thirst shelter sex and other bodily needs2 Safety Includes security and protection from physical and emotional harm3 Social Includes affection belongingness acceptance and friendship4 Esteem Includes internal esteem factors such as self-respect autonomy and achievementand external esteem factors such as status recognition and attention5 Self-actualisation The drive to become what one is capable of becoming includes growthachieving onersquos potential and self-fulfillmentMaslowrsquos hierarchy of needs consists of five basic categories of needs This figure illustrates bothgeneral and organizational examples of each type of need Of course each individual has a wide varietyof specific needs within each category

Maslow separated the five needs into higher and lower orders Physiological and safety needs weedescribed as lower order and social esteem and self-actualisation as higher order needs The differentiationbetween the two orders was made on the premise that higher - order needs are satisfied internally(within the person) whereas lower - order needs are predominantly satisfied externally In fact thenatural conclusion to be drawn from Maslowrsquos classification is that in times of economic plenty almostall permanently employed workers have their lower - order needs substantially met Litter support wasfound for the prediction that needs structures are organised along the dimensions proposed by Maslowthat unsatisfied needs motivate or that a satisfied need activates movement to a new need level

Evaluation of Maslowrsquos TheoryThe research studies clearly made clear that Maslow is not the final answer in work motivationMaslowrsquos need hierarchy provides researchers and practitioners neither with a system that gives completeunderstanding nor one that is invariant in its application but it does provide a provocative template forthe appreciation of the question of why people act as they do or what is motivation Even in itsawkward form Maslowrsquos model seems to apply to underdeveloped countries A survey of 200 factoryworkers in India points out that they give top priority to lower level needs Other studies also reveal thatMaslowrsquos model applies to managers and professional employees in developed countries like the UKand the USA American philosophers reveal that human needs do not conform to a hierarchy assuggested by Maslow Hall and Nougaim found that as managers advance in an organization theirphysiological and safety needs tend to decrease in importance and their needs for affiliation esteemand self-actualization tend to increase Further Porterrsquos research indicates that managers at all levelshad similar security and social needs and that the three higher needs on the hierarchy developed byMaslow varied greatly with managerial ranks

MotivationmdashHygiene TheoryThe motivation-hygiene theory was proposed by psychologist Frederick Herzberg In the belief that anindividualrsquos relation to his or her work is a basic one and that his or her attitude toward this work can very welldetermine the individualrsquos success or failure Herzberg investigated the question ldquoWhat do people want fromtheir jobs He asked people to describe in detail situations when they felt exceptionally good and bad abouttheir jobs From the categorized responses Herzberg concluded that the replies people gave when they feltgood about their jobs were significantly different from the replies given when they felt badFigure given below Shows motivation and hygiene factors

One might generalize at this point that individualrsquos act on the basis of their perceptions or interpretationof reality and not on the basis of reality itself In fact one of the reasons we study the behaviouralsciences is that they give us ways to get our perceptions closer and closer to reality The closer we getour perceptions to a given reality the higher the probability that we can have some impact on thatparticular piece of reality Therefore by bringing their perceptions closer and closer to realitymdashwhattheir people really wantmdashmanagers can often increase their effectiveness in working with employeesAccording to Herzberg the factors leading to job satisfaction are separate and distinct from thosethat lead to job dissatisfaction Therefore managers who seek to eliminate factors that create jobdissatisfaction can bring about peace but not necessarily motivation They will be placating their workforce rather than motivating them As a result such characteristics as company policy and administrationsupervision interpersonal relations working conditions and salary have been characterized by Herzbergas hygiene factors When they are adequate people will not be dissatisfied however neither will they besatisfied If we want to motivate people on their jobs Herzberg suggests emphasizing achievementrecognition the work itself responsibility and growth These are the characteristics that people findintrinsically rewarding

(a) Herzberg Versus Maslow Herzberg reduced Maslowrsquos five need levels into two distinctlevels of analysis The hygiene factors or dissatisfiers are analogous to Maslowrsquos lower-level needssuch as physiological safety and social They are essentially preventive factors that serve to reducedissatisfaction The absence of hygiene factors from the workplace leads to high levels of dissatisfactiontheir presence creates a state of lsquozero dissatisfactionrsquo or neutrality By themselves hygiene factors donot motivate individuals to better performanceThe motivators or satisfiers are equivalent to Maslowrsquos higher level needs These are the jobcontentfactors that motivate people to perform According to Herzberg only such factors as a challengingjob recognition for doing a good job and opportunities for advancement personal growth and developmentfoster motivated behaviour(b) Evaluation of Two-Factor Theory Herzberg made a valuable contribution to the knowledge

and understanding of the nature of job satisfaction His theory was welcomed by managers because itmaintained that money is not a true motivator The great value of his work relied emphasis on recognitionopportunity for advancement and other factors for motivating people Although his theory was anextension of Maslowrsquos need-based theory it provided new look to the question of how to get employeesto perform in a more better way

Theory X and Theory YDouglas McGregor proposed two distinct views of human beings one basically negative labeledTheory X and the other basically positive labeled Theory Y After viewing the way in which managersdealt with employees McGregor concluded that a managerrsquos view of the nature of human beings is basedon a certain grouping of assumptions and that he or she tends to mold his or her behaviour towardsubordinates according to these assumptions as mentioned earlier in chapter1 In contrast to these negativeviews about the nature of human beings McGregor listed the four positive assumptions as describedearlier in chapter 1 that he called Theory YWhat are the motivational implications if you accept McGregorrsquosanalysis The answer is best expressed in the framework presented by Maslow Theory X assumes thatlower-order needs dominate individuals McGregor himself held to the belief that Theory Y assumptionswere more valid than Theory X Therefore he proposed such ideas as participative decision makingresponsible and challenging jobs and good group relations as approaches that would maximise an employeersquosjob motivation Unfortunately there is no evidence to confirm that either set of assumptions is valid or thataccepting Theory Y assumptions and altering onersquos actions accordingly will lead to more motivated workers

ERG TheoryClayton Alderfer of Yale University has reworked Maslowrsquos need hierarchy to align it more closelywith the empirical research His revised need hierarchy is labeled ERG theory Alderfer argues that thereare groups of core needmdashexistence relatedness and growthmdashhence the label ERG theory The existencegroup is concerned with providing our basic material existence requirements They include the itemsthat Maslow considered to be physiological and safety needs The second groups of needs are those ofrelatednessmdashthe desire we have for maintaining important interpersonal relationships These social andstatus desires require interaction with others if they are to be satisfied and they align with Maslowrsquossocial need and the external component of Maslowrsquos esteem classification Finally Alderfer isolatesgrowth needsmdashan intrinsic desire for personal development These include the intrinsic componentfrom Maslowrsquos esteem category and the characteristics included under self-actualisation

The ERG theory demonstrates that (1) more than one need may be operative at the same time andif the gratification of a higher - level need is stifled the desire to satisfy a lower - level need increasesERG theory also contains a frustration - regression dimension Maslow yoursquoll remember argued that anindividual would stay at a certain need level until that need was satisfied ERG theory counters by notingthat when a higher - order need level is frustrated the individualrsquos desire to increase a lower level needtakes place Inability to satisfy a need for social interaction for instance might increase the desire formore money or better working conditions So frustration chanced to a regression to a lower need ERGtheory is more consistent with our knowledge of individual differences among people Variables such aseducation family background and cultural environment can alter the importance or driving force that agroup of needs holds for a particular individual The evidence demonstrating that people in other culturesrank the need categories differently - for instance natives of Spain and Japan place social needs beforetheir physiological requirements would be consistent with ERG theory

McClellandrsquos Theory of NeedsMcClellandrsquos Theory of Needs was developed by David McClelland and his associates Thetheory focuses on three needs achievement power and affiliation They are defined as follows Needs for achievement The drive to excel to achieve in relation to a set of standards tostrive to succeedNeed for power The need to make others behave in a way that they would nothave behaved otherwise and

Need for affiliation The desire for friendly and close interpersonal relationshipsSome people have a compelling drive to succeed Theyrsquore striving for personal achievement ratherthan the rewards of success per se They have a desire to do something better or more efficiently thanit has been done before This drive is the achievement need From research into the achievement needMcClelland found that high achievers differentiate themselves from others by their desire to do thingsbetter They seek situations where they attain personal responsibility for finding solutions to problemswhere they can receive rapid feedback on their performance so they can tell easily whether they areimproving or not and where they can set moderately challenging goals High achievers are not gamblersthey dislike succeeding by chance They prefer the challenge of working at a problem and accepting thepersonal responsibility for success or failure rather than leaving the outcome to chance or the actions ofothers Importantly they avoid what they perceive to be very easy or very difficult tasks They want toovercome obstacles but they want to feel that their success is due to their own actions This meansthey like tasks of intermediate difficulty

Content Theories in PerspectiveThe five content theories of motivation we have discussed are summarized in Table Takentogether these theories challenge leaders managers and organizational members to the following_ Gain an understanding of their own needs and the needs of those with whom they work andmanagethe nature of the work_ Create learning environments that motivate the needs of individuals and terms to performmore effectively and with qualitySome of the commonalities of the four theories include a recognition of the role that human needsplay in organization satisfaction performance and growth and the distinction between lower-and higherlevelneeds Higher-level needs for Maslow include self-actualization esteem and belonging for Alderferthey are growth and relatedness for Herzberg motivational factors and for McClelland they areachievement and power There are important distinctions in the four theories Maslow held to a hierarchyof five needs Alderfer constructed a hierarchy of three needs with much more flexibility Herzberg usedtwo factors that did and did not motivate employees (eg dissatisfies) McClelland found that threeneeds common to all cultures he viewed all people as learned and capable of being taught Most of thesetheories lack sufficient empirical validation especially from a cross-cultural perspective but they are astarting point for discussing the role of human needs and motivation in the work place They can also beused to discover the effects of organizational change on individualrsquos needs and motivations Managerscan use the vocabulary and concepts of the content theories in employee interviews and dialogues toidentify development and training areas in which employee motivation can be improved

PROCESS THEORIES OF MOTIVATIONProcess theories use external variable to identify individual sources of motivation Whereas contenttheories deal with intrapersonal internal sources (ie needs) for motivation process theories includeperceived and actual exogenous workplace dimensions For example performance goals and tasksLearning Theory and MotivationLearning is an integral part of motivation for several reasons First expectations needs and responsesthat are motivating and demotivating are learned (or not learned) Understanding how we learn can assistorganization leaders and members in diagnosing motivational levels and finding ways to enhance themsecond since rewards and punishments are a vital part of human motivation understanding how peoplelearn to respond to rewards and punishments can assist organization leaders and managers in allocatingrewards more effectively Finally learning has taken on added importance in the process of ldquocontinuousimprovementrdquo Influenced by the Japanese concept of Kaizen (translated as ldquocontinuous improvementrdquo)which focuses not on ldquoquick fixesrdquo to problems or opportunities but on transformational incrementaland organization wide learning processes that enhance product and service quality many successfulcorporations practice Kaizen Learning how we learn is important to enable self-improvement(a) Behaviour Modification The basic tenet in the behaviour modification approach to learningis that to effect change behaviours must be addressed rather than their psychological inferences orcauses Behavioural modification specialists therefore approach human problems in organizational by

focussing on specific behaviours A five-step behavioural modification model addresses change asfollows Motivation 971 Identify and define specific behaviour (s) Can these be seen Can they be measured 2 Establish a baseline Before attempting to change the behaviour determine its strength in thepresent by measuring or counting the occurrences of the behaviour3 Analyze the A-BCs (antecedents behaviours consequences) of the behaviour to determinethe source of the problem4 Develop and implement an action plan using operant conditioning strengthen the desirablebehaviours and weaken or extinguish the undesirable one through conditioning techniques5 Evaluate the effects of the change using different measurements(b) Cognitive Evaluation Theory The introduction of extrinsic rewards such as pay For workeffort that had been previously intrinsically rewarding due to the pleasure associated with the content ofthe work itself would tend to decrease the overall level of motivation This proposal which has come tobe called the cognitive evaluation theory has been extensively researched and a large number ofstudies have been supportive Historically motivation theorists have generally assumed that intrinsicmotivations such as achievement responsibility and competence are independent of extrinsic motivatorslike high pay Promotions good supervisor relations and pleasant working conditions That is thestimulation of one would not affect the other But the cognitive evaluation theory suggests otherwise Itargues that when extrinsic rewards which are derived from individuals doing what they like are reducedIn other words when extrinsic rewards are given to someone for performing an interesting task itcauses intrinsic interest in the task itself to decline The theory may have limited applicability to workorganisations because most low-level jobs are not inherently satisfying enough to foster high intrinsicinterest and many managerial and professional positions offer intrinsic rewards Cognitive evaluationtheory may be relevant to that set of organisational jobs that falls in between - those that are neitherextremely dull nor extremely interesting(c) Goal-Setting Theory Gene Broadwater coach of the Hamilton High School Cross-countryteam gave his squad these last words before they approached the line for the league championship raceldquoEach one of you is physically ready Now get out there and do your best No one can ever ask more ofyou than thatrdquo In the late 1960s Edwin Locke proposed that intentions to work toward a goal are amajor source of work motivation That is goals tell an employee what needs to be done and how mucheffort will need to be expended The evidence strongly supports the value of goals More to the pointwe can say that specific goals increase performance that difficult goals when accepted result in higherperformance than do easy goals and that feedback leads to higher performance than does non-feedbackSpecific hard goals produce a higher level of output than does the generalized goal of ldquodo your bestrdquoThe specificity of the goal itself acts as an internal stimulus If factors like ability and acceptance of thegoals are held constant we can also state that the more difficult the goal the higher the level ofperformance However itrsquos logical to assume that easier goals are more likely to be accepted But oncean employee accepts a hard task he or she will exert a high level of effort until it is achieved loweredor abandoned(d) Reinforcement Theory A counterpoint to goal - setting theory is reinforcement theoryThe former is a cognitive approach proposing that and individualrsquos purposes direct his or her action Inreinforcement theory we have a behaviouristic approach which argues that reinforcement conditionsbehaviour Reinforcement theory ignores the inner state of the individual and concentrates solely onwhat happens to a person when he or she takes some action Because it does not concern itself withwhat initiates behaviour it is not strictly speaking a theory of motivation But it does provide a powerfulmeans of analysis of what controls behaviour and it is for this reason that it is typically considered indiscussions of motivation Employees might compare themselves to friends neighbours co-workerscolleagues in other organisations or past jobs they themselves have had Which referent an employeechooses will be influenced by the information the employee holds about referents as well as by theattractiveness of the referent This has led to focusing on four moderating variables - gender length oftenure level in the organisation and amount of education or professionalism Research shows that bothmen and women prefer same sex comparisons Based on equity theory when employees perceive an

inequity they can be presented to make one of six choices(e) Expectancy Theory Currently one of the most widely accepted explanations of motivation isVictor Vroomrsquos expectancy theory The theory therefore focuses on three relationships The strengthof a tendency to act in a certain way depends on the strength of an expectation that the act will befollowed by a given outcome and on the attractiveness of that outcome to the individual_ Effort-performance relationship The probability perceived by the individual that exerting agiven amount of effort would lead to performance_ Performance-reward relationship The degree to which the individual believes that performingat a particular level will lead to the attainment of a desired outcome_ Rewards-personal goals relationship The degree to which organisational rewards satisfy anindividualrsquos personal goals or needs and the attractiveness of those potential rewards for theindividual(f) The Porter-Lawler Model The Porter and Lawler expectancy model provides interestinginsights into the relationships between satisfaction and performance As illustrated here this modelpredicts that satisfaction is determined by the perceived equity of intrinsic and extrinsic rewards forperformance That is rather than satisfaction causing performance which many people might predictthis model argues that it is actually performance that eventually leads to satisfaction_ Determine the primary outcomes each employee wants_ Decide what levels and kinds of performance are needed to meet organizational goals_ Make sure the desired levels of performance are possible_ Link desired outcomes and desired performance_ Analyze the situation for conflicting expectancies_ Make sure the rewards are large enough_ Make sure the overall system is equitable for everyone(g) Equity Theory Equity theory recognizes that individuals are concerned not only with theabsolute amount of rewards they receive for their efforts but also with the relationship of this amountto what others receive The make judgements as to the relationship between their inputs and outcomesand the inputs and outcomes of others Based on onersquos inputs such as effort experience educationand competence one compares outcomes such as salary levels raises recognition and other factorsWhen people perceive an imbalance in their outcome-input ratio relative to others tension is createdThis tension provides the basis for motivation as people strive for what they perceive as equity andfairness Specifically the theory establishes four propositions relating to inequitable pay 1 Given payment by time over rewarded employees will produce more than will equitably paidemployees2 Given payment by quantity of production over rewarded employees will produce fewer buthigher quality units than will equitably paid employeesMotivation 993 Given payment by time under rewarded employees will produce less or poorer quality ofoutput4 Given payment by quantity of production under rewarded employees will produce a largenumber of low-quality units in comparison with equitably paid employeesIn conclusion equity theory demonstrates that for most employees motivation is influencedsignificantly by relative rewards as well as by absolute rewards but some key issues are still unclearFor instance how do employees handle conflicting equity signals such as when unions point to otheremployee groups who are substantially better off while management argues how much things haveimproved Yet regardless of these problems equity theory continues to offer us some importantinsights into employee motivation

MANAGING MOTIVATION AND CHANGEThe scope radical nature and fast rate of planned organizational change as as stated earlier beenunprecedented in recent times Mergers acquisitions strategic alliances reengineering and downsizingactivities have significantly taken off The extent to which these levels of organizational change willcontinue is uncertain however it has been predicated that organizational change will become a constantthat

is change will no longer be a single event Because information technologies are also changing thevery nature of work and expertise requirements employee motivation takes on an even greater importanceSeveral practices to enhance motivation in the contemporary workplace have been suggested _ Ensure that employeesrsquo motives and values are appropriate and ldquofitrdquo the jobs on which theyare placed_ Ensure that jobs roles and responsibilities are attractive and consistent with employeesrsquovalues beliefs and motives_ Assist employees and ensure that work goals are clear challenging attractive and attainable_ Provide employees with required personal and material resources that enhance theireffectiveness_ Create and sustain supportive social and working environments_ Recognize and reinforce performance and_ Ensure that the elements are harmonized and fit into a consistent sociotechnical organizationalsystemManaging motivation in rapidly and continuously changing organizational settings will requireflexibility focus experimentation the skill of balancing paradoxes openly communicating and testingassumptions and being open to and skilled in implementing planned change Motivation is to a largeextent culturally conditioned and learned Individual organization members working with those fromdifferent cultures should not assume when the topic is motivations whether it be needs expectanciesor satisfiers These individuals should find out what the basic cultural orientation is - whether it iscollectivist individuals productivity or quality of life oriented uncertainty avoidance or comfort withambiguity Not everyone from a culture shares all of its basic societal values but these values can and doinfluence unspoken beliefs attitudes and motivations A personrsquos own values or motivational assumptionand standards should not be accepted as absoluteThe characteristics of a changing ever-more diverse workforce suggests that managing motivationwill be challenging and difficult The challenge for owners managers and organization members will beto find ways to integrate not assimilate the diverse individuals and to address their motivational needsIntegrating and motivating a diverse workforce involves understanding and addressing value differencesValuing and motivating diverse workforces must be organizational priorities The scope radical natureand fast rate of planned organizational change in recent times have been unprecedented Several practiceshave been suggested to enhance motivation in the contemporary workplace These include ensuring thatemployeersquo motives and values are appropriate and fit the jobs in which they are placed that jobs rolesand responsibilities are attractive and consistent with employeesrsquo values beliefs and motives and thatwork goals are clear challenging attractive and attainable Other ways to enhance motivation includeproviding employees with required personal and material resources that enhance their effectivenesscreating and sustaining supportive social and working environments recognizing and reinforcingperformance and ensuring that these elements are harmonized and fit into a consistent socio-technicalorganizational system Managing motivation in rapidly and continuously changing organizational settingswill require flexibility focus experimentation the skill of balancing paradoxes openly communicatingand testing assumptions and being open to and skilled in implementing planned change MONEY AS A MOTIVATORThe widespread misconception about finance being a motivating factor or motivator in industry has ledto the failure of the best-laid incentive plans The Wire Meld company USA after a six week drive thecompany concluded that awarding war bonds to employees for perfect attendance was not the solutionto absenteeism Habits of the employees were not influenced by the plan Most of those who had beenirregular in attendance before the award system was inaugurated were irregular There was a bus slowdown in New York in it easy 1980rsquos due to the refusal of drivers (bus) to work overtime They were notinterested in more money They felt they were tired after duty to engage in extra work An analysis ofthese drivers indicated an average income of 3200 a year an income that even then could not beconsidered very highEver since Taylorrsquos time ldquoexpertsrdquo have concocted one wage incentive system after anotherresulting in a myriad of these Lytle (1938) gave one of the most comprehensive reviews of wageincentive plans He believed such plans were important in any cost production problem He cited two

advantages of wage incentive plans as being (1) an increase in production per unit (2) an increase inemployeesrsquo earnings He believed that the advantages of a well-installed and ably managed wage paymentplan accrue annually to employees and employers It is then difficult to demarcate (among) the variousincentive systems from the industrial psychologists point of view Lytlersquos attempt to classify all financialincentive plans on the basis of production earning characteristics is shown below Itrsquos an idea of thenumerous systems that have been promoted This is a historical method and is least used todayClass I Employee takes all gain or lossTime Hour week or any straight statuary rate not an extra incentiveStandard time using two rates one either side of the task a two zone multipletime planMultiple time With Arithmetic in rate between production zones (standard time plan)Multiple time Geometric steps in rate between production zonesClass II Employee takes all gainPiece or straight commission rate this sub divides into punitive basic andhigh etcClass III Gain shared between employer and employee but day wage guaranteedexception one-third premiumClass IV Empirical location of points between two variables piecework or commissionabove 100 productionMotivation 101Theories Concerning Money as an InentiveOpsahl and Dunnettee (1966) list 5 theories in this respect These attempt to explain the effect ormoney or job performancea Money as a generalised conditioned Reinforcer Money due to its association with morebasic reinforcers (need satisfiers) acquires the status of a secondary reinforcer Wolf studies (1936) andCowles (1937) demonstrated that poker chips acquired requirements value when they could be exchangedfor food ie subjects in their experiments worked as hard to get clops which could lsquobuyrsquo food as theyhad previously worked for food itselfb Money as a conditioning incentive Money acquires an incentive value due to continuedpairing with other incentives of a more basic nature Despite laboratory data this method is difficult topractice It is difficult to point out the more basic incentives with which money can be pairedc Money as an anxiety reducer The absence of money is generally associated with anxietyreactions in our society Therefore lack of money becomes a conditioned stimulus for an anxiety responseMoney therefore serves as a reducer of anxietyd Money as a ldquoHygiene Factorrdquo Herzberg Mausner and Synderman in their notion of satisfierand dissatisfies are viewed as being two distinct classes of motivators ldquoMoney is a hygiene factorwhich serves primarily as a dissatisfier ie causes dissatisfaction when absent but contributes a little tosatisfaction when present It is uncertain whether their data supports this hypothesis (Opsahl and Dunnette1966)e Money as a means of Instrumentality According to Vroomrsquos Theory of Motivation Modelmoney acquires valence due to its perceived instrumentality for obtaining the desired outcomes eg Ifmoney were perceived as being instrumental to the positive goal of security then money would acquirea positive valance Then the likelihood of a person acting in a way to acquire money would be a functionof his need for security multiplied by the expectancy that a particular money-seeking act would result ina specified monetary return A simple numerical explanation would beLm = f (s) times EwhereLm = Likelihood of a person acting in a way to acquire moneyS = Need for securityE = Expectancy that a particular money seeking act would result in a specifiedmonetary returnIn their review on the role of financial compensation in industrial motivation (Opsahl and Dunnette1966) state The role of money as reward in modern industry continues to be poorly understood despite

our economies being based on a monetary reward system Although the use of formal incentive paysystems has diminished in recent years in favour of other non-financial incentives money units willprobably always be exchanged for work Thus a better knowledge of the dynamics of this exchangeprocess is certainly neededKinds of IncentivesIncentives may be classified financial and non-financial More aptly co-operative and competitive(i) Co-operation Incentives This involves organising people into groups (meaningful groups)and having them work together for a common goal This is the latest of kinds of incentivesand is practiced in industry as well as educational institutions This results in more learning atthe educational level and greater production at the industrial level People contribute equal andmaximum efforts towards the realisation of common goal102 (ii) Competitive Incentives These involve the urge of doing better than the next individual(iii) Individual IncentivesThese are extremely meaningful if the individual himself introducesthem In industry the incentive is used as a means of spurring an employee towards someoneelsersquos goal He may not be interested in either reduced costs or increased production But hemay be persuaded to achieve his goal by an incentive when the incentive results in equalsatisfaction for the employer too when the plant is being successfully operated The majordifficulty with financial incentives has been the facts that fear of a rate cut-whether the fear isjustified or not They also fear a lay off Hence indifference or evasiveness to wage raisesBoth competition and co-operation are not mutually inclusive especially when individuals cooperatein-groups to compete with other groups Industry in the past has placed too much emphasis oncompetition only recently have the advantages of co-operative behaviour as an incentive been recognisedThe use of co-operation as an incentive holds considerable promise of successResearch on IncentivesA host of experts have attempted in divulge into the issue of incentives and it is conspicuous thateach one of them has endeavored to surpass their predecessor or rather improve on the previousstudies(a) Blum and Ruess Study In this study 5 drives were listed in an attempt to determine therelative importance of these five incentives on an employee in a job The data were obtained from 286gainfully employed people from 17-60 years of age and in occupation from unskilled manual labour tothe professionals there were 181 men 72 of whom were married and 105 women 26 of whom weremarried all subjects lived in New York city area A questionnaire was prepared aimed at comparing theemployeesrsquo incentive with the other four in all 10 comparisons Each time one incentive is compared tothe other in the comparison a score is assigned to it ie a maximum of ten points is distributed amongthe five incentives Then the scores were tabulated thus against the five incentives the purpose of thequestionnaire was not disclosed to the subject till after completing itFindingsIn this study they have measured the attitudes of employees toward time incentives at the paidtechnique it was found that_ Advancement and security were the most important_ Incentives hours of work were the least important_ Salary was rated third by men 4th women_ Supervisor relationships were ranked fourth by men and third by women_ Married men considered security more important and advancement less important than didsingle men_ Married women were more interested in working fewer hours than were the single women_ The significance of advancement as an incentive decreased with age for both sexes andsecurity became more important with age_ Advancement and security were considered more important than salary and_ The attitudes of the employees changed depending on such major classifications as sex maritalstatus and ageMotivation 103

(b) Jurgensen Study His study involved 150 females and 1189 male applicants for positions atthe Minnea Polis Gas Light Company Each subject was asked to rank ten items in order of preferenceFindingsJob Preferences were affected by the extent of Education than by most other variablesAdvancement became more important and security less important as education increasedAccording to his findings wages hours and working conditions are not so important as generallythought and the type of work is more important than is ordinarily stated(c) Stagner Study The study included 7000 employees of a Nationwide Corporation After viewingvarious researchers he concludes that neither executives nor workers are concerned about pay as suchexcept when economically pinched At other times they prefer ego-satisfactions such as prestigerecognition and individual treatment He rated the importance by 7000 workers on various job factors(d) Jones and Jeffrey Study This is a study which evaluated preferences among electricalworkers for alternate form of job compensation They considered each of four different compensationdimensions listed belowHourly wage versus weekly wageMerit incentive versus non-merit incentivePiecework incentive versus no piecework incentive andRegular pay rate versus high pay rateFindingsNon-union workers significantly preferred the weekly wage the merit incentive the pieceworkincentive and the higher wage Union Members were willing to take jobs with non-merit incentive andregular pay in preference to jobs having merit incentives with higher pay They would forfeit money tostay clear of a merit system This would certainly seem to argue that the union as an organisationprovides the workers with some form of ldquogroup protectionrdquo or security that is worth a sacrifice inactual money units He no longer has to bargain for himself but is part of a larger body which bargainsin much broader terms(e) Nealey Study He examined work preference for different employee benefit programmes Hehad 1133 members of an electrical trade union panel compare the following six-benefit option1 The company will pay the cost of an additional 50 a month pension to be added to retirementbenefit2 I will get a percent raise3 The normal workweek shall be cut to 375 hrs Without any reduction in weekly earnings4 The company will pay the entire costs of full medical insurance for my family and myself5 It will be agreed that all regular employees must be members of the union and6 I will have three weeks paid vacation in a year in addition to my present vacation to the extravacation to be taken when I chooseThe six plans were chosen so as to be of approximately equal cost to the employerIn general the workers preferred medical insurance option and the union were unimpressed withthe enticement of 375 hours week104 Major FindingsThere is a tremendous increase in preference for the pension plan as one moves into older age groupsThe union is judged the most desirable (relative to other plans) among the middle-aged workersThe 3-week additional vacation was most preferred on a move through the older groups(f) DudychandashNaylor Study (1966) The study was designed to examine what job characteristicswere of primary importance to todayrsquos college studentsFindingsStudents in their sample gave the following order of job traits1 Pay2 Opportunity for growth and advancement3 Security4 Fellow employees5 Working conditions and

6 Supervisor-employee relationsThese were students who for most part had never held regular job and who were indicating whatthings they felt would be important when they did start choosing between job opportunities Theyplaced high weight to pay(g) Maslowrsquos View on Financial Incentives Maslowrsquos theory of motivation dismisses financeas a motivator He argued that money satisfies only lower needs (safety and psychological needs) let thehigher order needIn one survey he found that when managers were asked what factors they felt determined theirpay they responded training and experience were the most important factors

Theory X and Theory Y Douglas McGregor (1960)Douglas McGregor and MIT psychologist proposed two sets of assumptions about humanmotivation that a manager can hold McGregor called the assumptions Theory X and Theory Y Amanagerrsquos behaviour toward his workers and his management style will differ based on the assumptionsguiding his behaviour10487661048766The average person dislikes working and will avoid it if possible10487661048766Because people dislike working they must be directed tightly controlled and pressured to getthem to work toward organizational goals10487661048766The average person wants security avoids responsibility and has little ambition and10487661048766McGregor believed that many managers held Theory X assumption about workers Suchmanagers give their workers little latitude closely supervise them and punish poor performanceThey use few rewards and typically give only negative feedbackThe Theory Y assumptions are as follows10487661048766The average person does not dislike work it is as natural as play10487661048766If a person is committed to a set he will work towards them without an external control10487661048766Goal commitment follows from the satisfaction of a personrsquos desire to achieve10487661048766The average person can learn to accept responsibility Lack of ambition is not a basic humancharacteristic10487661048766Creativity ingenuity and imagination are human characteristics that are widely dispersed inthe population and10487661048766Modern organizations only partially use and tap the potentialities of its workersManagers who hold Theory Y assumptions have a positive view of people believe they have muchhidden potential and that people will work toward organizational goals These managers will give workersmore job responsibility and reply on self-motivation more than coercion These two sets of differentassumptions reigned in the academic literature for many years They were widely understood by practicingmanagers Although called a theory they are not theories as described earlier They are assumptions orbeliefs about human motivation that can strongly affect management behaviourThe Twentieth Centuryrsquos Management Guru Peter F Drucker (1995)Austrian born Peter F Drucker ranks among the most widely read and widely quoted managementscholars of the twentieth century Drucker is a professor of management a Claremont College in Californiaa post he has held since 1971 He has written almost 30 books and continued his writing activity into thelate 1990s His 1954 book The Practice of Management launched him as a significant managementwriter Among his most lasting observations was his proposed philosophy of management by objectivesand self-control General Electric was the first company to adopt management by objectives (MBO) andput it into practice with Druckerrsquos help as a consultant Drucker has an insatiable appetite for statisticsHe examines them for a pattern often finds pattern that others miss Here are his predictions for eventsunfolding until about 201010487661048766A rise in alliance partnership and joint ventures on a global scale Technology will help linkthese parts of an emerging ldquoNetwork Societyrdquo10487661048766A compelling need for decentralized organizations in an increasing uncertain environment10487661048766A related increased in the use of teams in organizationsOverview of Organization Behaviour in the New Millennium 15

10487661048766An increase in the number of knowledge workers (for example computer technologists andmedical workers) and continual decline in the number of blue-collar and agricultural workersin all developed free-marked countries The knowledge workers will need continuous learninga characteristic with implications for educational systems10487661048766The twenty-first century will see the evolution of knowledge societies in developed countriesThese societies will have three sectors Business government and nonprofit The last is newand helps peoplersquos social development Nonprofit volunteer activities will characterize Englishspeakingcountries but appear fewer elsewhere and10487661048766An unquestionable forming of a world economy in which world markets will become moreimportant than domestic markets

One might generalize at this point that individualrsquos act on the basis of their perceptions or interpretationof reality and not on the basis of reality itself In fact one of the reasons we study the behaviouralsciences is that they give us ways to get our perceptions closer and closer to reality The closer we getour perceptions to a given reality the higher the probability that we can have some impact on thatparticular piece of reality Therefore by bringing their perceptions closer and closer to realitymdashwhattheir people really wantmdashmanagers can often increase their effectiveness in working with employeesAccording to Herzberg the factors leading to job satisfaction are separate and distinct from thosethat lead to job dissatisfaction Therefore managers who seek to eliminate factors that create jobdissatisfaction can bring about peace but not necessarily motivation They will be placating their workforce rather than motivating them As a result such characteristics as company policy and administrationsupervision interpersonal relations working conditions and salary have been characterized by Herzbergas hygiene factors When they are adequate people will not be dissatisfied however neither will they besatisfied If we want to motivate people on their jobs Herzberg suggests emphasizing achievementrecognition the work itself responsibility and growth These are the characteristics that people findintrinsically rewarding

(a) Herzberg Versus Maslow Herzberg reduced Maslowrsquos five need levels into two distinctlevels of analysis The hygiene factors or dissatisfiers are analogous to Maslowrsquos lower-level needssuch as physiological safety and social They are essentially preventive factors that serve to reducedissatisfaction The absence of hygiene factors from the workplace leads to high levels of dissatisfactiontheir presence creates a state of lsquozero dissatisfactionrsquo or neutrality By themselves hygiene factors donot motivate individuals to better performanceThe motivators or satisfiers are equivalent to Maslowrsquos higher level needs These are the jobcontentfactors that motivate people to perform According to Herzberg only such factors as a challengingjob recognition for doing a good job and opportunities for advancement personal growth and developmentfoster motivated behaviour(b) Evaluation of Two-Factor Theory Herzberg made a valuable contribution to the knowledge

and understanding of the nature of job satisfaction His theory was welcomed by managers because itmaintained that money is not a true motivator The great value of his work relied emphasis on recognitionopportunity for advancement and other factors for motivating people Although his theory was anextension of Maslowrsquos need-based theory it provided new look to the question of how to get employeesto perform in a more better way

Theory X and Theory YDouglas McGregor proposed two distinct views of human beings one basically negative labeledTheory X and the other basically positive labeled Theory Y After viewing the way in which managersdealt with employees McGregor concluded that a managerrsquos view of the nature of human beings is basedon a certain grouping of assumptions and that he or she tends to mold his or her behaviour towardsubordinates according to these assumptions as mentioned earlier in chapter1 In contrast to these negativeviews about the nature of human beings McGregor listed the four positive assumptions as describedearlier in chapter 1 that he called Theory YWhat are the motivational implications if you accept McGregorrsquosanalysis The answer is best expressed in the framework presented by Maslow Theory X assumes thatlower-order needs dominate individuals McGregor himself held to the belief that Theory Y assumptionswere more valid than Theory X Therefore he proposed such ideas as participative decision makingresponsible and challenging jobs and good group relations as approaches that would maximise an employeersquosjob motivation Unfortunately there is no evidence to confirm that either set of assumptions is valid or thataccepting Theory Y assumptions and altering onersquos actions accordingly will lead to more motivated workers

ERG TheoryClayton Alderfer of Yale University has reworked Maslowrsquos need hierarchy to align it more closelywith the empirical research His revised need hierarchy is labeled ERG theory Alderfer argues that thereare groups of core needmdashexistence relatedness and growthmdashhence the label ERG theory The existencegroup is concerned with providing our basic material existence requirements They include the itemsthat Maslow considered to be physiological and safety needs The second groups of needs are those ofrelatednessmdashthe desire we have for maintaining important interpersonal relationships These social andstatus desires require interaction with others if they are to be satisfied and they align with Maslowrsquossocial need and the external component of Maslowrsquos esteem classification Finally Alderfer isolatesgrowth needsmdashan intrinsic desire for personal development These include the intrinsic componentfrom Maslowrsquos esteem category and the characteristics included under self-actualisation

The ERG theory demonstrates that (1) more than one need may be operative at the same time andif the gratification of a higher - level need is stifled the desire to satisfy a lower - level need increasesERG theory also contains a frustration - regression dimension Maslow yoursquoll remember argued that anindividual would stay at a certain need level until that need was satisfied ERG theory counters by notingthat when a higher - order need level is frustrated the individualrsquos desire to increase a lower level needtakes place Inability to satisfy a need for social interaction for instance might increase the desire formore money or better working conditions So frustration chanced to a regression to a lower need ERGtheory is more consistent with our knowledge of individual differences among people Variables such aseducation family background and cultural environment can alter the importance or driving force that agroup of needs holds for a particular individual The evidence demonstrating that people in other culturesrank the need categories differently - for instance natives of Spain and Japan place social needs beforetheir physiological requirements would be consistent with ERG theory

McClellandrsquos Theory of NeedsMcClellandrsquos Theory of Needs was developed by David McClelland and his associates Thetheory focuses on three needs achievement power and affiliation They are defined as follows Needs for achievement The drive to excel to achieve in relation to a set of standards tostrive to succeedNeed for power The need to make others behave in a way that they would nothave behaved otherwise and

Need for affiliation The desire for friendly and close interpersonal relationshipsSome people have a compelling drive to succeed Theyrsquore striving for personal achievement ratherthan the rewards of success per se They have a desire to do something better or more efficiently thanit has been done before This drive is the achievement need From research into the achievement needMcClelland found that high achievers differentiate themselves from others by their desire to do thingsbetter They seek situations where they attain personal responsibility for finding solutions to problemswhere they can receive rapid feedback on their performance so they can tell easily whether they areimproving or not and where they can set moderately challenging goals High achievers are not gamblersthey dislike succeeding by chance They prefer the challenge of working at a problem and accepting thepersonal responsibility for success or failure rather than leaving the outcome to chance or the actions ofothers Importantly they avoid what they perceive to be very easy or very difficult tasks They want toovercome obstacles but they want to feel that their success is due to their own actions This meansthey like tasks of intermediate difficulty

Content Theories in PerspectiveThe five content theories of motivation we have discussed are summarized in Table Takentogether these theories challenge leaders managers and organizational members to the following_ Gain an understanding of their own needs and the needs of those with whom they work andmanagethe nature of the work_ Create learning environments that motivate the needs of individuals and terms to performmore effectively and with qualitySome of the commonalities of the four theories include a recognition of the role that human needsplay in organization satisfaction performance and growth and the distinction between lower-and higherlevelneeds Higher-level needs for Maslow include self-actualization esteem and belonging for Alderferthey are growth and relatedness for Herzberg motivational factors and for McClelland they areachievement and power There are important distinctions in the four theories Maslow held to a hierarchyof five needs Alderfer constructed a hierarchy of three needs with much more flexibility Herzberg usedtwo factors that did and did not motivate employees (eg dissatisfies) McClelland found that threeneeds common to all cultures he viewed all people as learned and capable of being taught Most of thesetheories lack sufficient empirical validation especially from a cross-cultural perspective but they are astarting point for discussing the role of human needs and motivation in the work place They can also beused to discover the effects of organizational change on individualrsquos needs and motivations Managerscan use the vocabulary and concepts of the content theories in employee interviews and dialogues toidentify development and training areas in which employee motivation can be improved

PROCESS THEORIES OF MOTIVATIONProcess theories use external variable to identify individual sources of motivation Whereas contenttheories deal with intrapersonal internal sources (ie needs) for motivation process theories includeperceived and actual exogenous workplace dimensions For example performance goals and tasksLearning Theory and MotivationLearning is an integral part of motivation for several reasons First expectations needs and responsesthat are motivating and demotivating are learned (or not learned) Understanding how we learn can assistorganization leaders and members in diagnosing motivational levels and finding ways to enhance themsecond since rewards and punishments are a vital part of human motivation understanding how peoplelearn to respond to rewards and punishments can assist organization leaders and managers in allocatingrewards more effectively Finally learning has taken on added importance in the process of ldquocontinuousimprovementrdquo Influenced by the Japanese concept of Kaizen (translated as ldquocontinuous improvementrdquo)which focuses not on ldquoquick fixesrdquo to problems or opportunities but on transformational incrementaland organization wide learning processes that enhance product and service quality many successfulcorporations practice Kaizen Learning how we learn is important to enable self-improvement(a) Behaviour Modification The basic tenet in the behaviour modification approach to learningis that to effect change behaviours must be addressed rather than their psychological inferences orcauses Behavioural modification specialists therefore approach human problems in organizational by

focussing on specific behaviours A five-step behavioural modification model addresses change asfollows Motivation 971 Identify and define specific behaviour (s) Can these be seen Can they be measured 2 Establish a baseline Before attempting to change the behaviour determine its strength in thepresent by measuring or counting the occurrences of the behaviour3 Analyze the A-BCs (antecedents behaviours consequences) of the behaviour to determinethe source of the problem4 Develop and implement an action plan using operant conditioning strengthen the desirablebehaviours and weaken or extinguish the undesirable one through conditioning techniques5 Evaluate the effects of the change using different measurements(b) Cognitive Evaluation Theory The introduction of extrinsic rewards such as pay For workeffort that had been previously intrinsically rewarding due to the pleasure associated with the content ofthe work itself would tend to decrease the overall level of motivation This proposal which has come tobe called the cognitive evaluation theory has been extensively researched and a large number ofstudies have been supportive Historically motivation theorists have generally assumed that intrinsicmotivations such as achievement responsibility and competence are independent of extrinsic motivatorslike high pay Promotions good supervisor relations and pleasant working conditions That is thestimulation of one would not affect the other But the cognitive evaluation theory suggests otherwise Itargues that when extrinsic rewards which are derived from individuals doing what they like are reducedIn other words when extrinsic rewards are given to someone for performing an interesting task itcauses intrinsic interest in the task itself to decline The theory may have limited applicability to workorganisations because most low-level jobs are not inherently satisfying enough to foster high intrinsicinterest and many managerial and professional positions offer intrinsic rewards Cognitive evaluationtheory may be relevant to that set of organisational jobs that falls in between - those that are neitherextremely dull nor extremely interesting(c) Goal-Setting Theory Gene Broadwater coach of the Hamilton High School Cross-countryteam gave his squad these last words before they approached the line for the league championship raceldquoEach one of you is physically ready Now get out there and do your best No one can ever ask more ofyou than thatrdquo In the late 1960s Edwin Locke proposed that intentions to work toward a goal are amajor source of work motivation That is goals tell an employee what needs to be done and how mucheffort will need to be expended The evidence strongly supports the value of goals More to the pointwe can say that specific goals increase performance that difficult goals when accepted result in higherperformance than do easy goals and that feedback leads to higher performance than does non-feedbackSpecific hard goals produce a higher level of output than does the generalized goal of ldquodo your bestrdquoThe specificity of the goal itself acts as an internal stimulus If factors like ability and acceptance of thegoals are held constant we can also state that the more difficult the goal the higher the level ofperformance However itrsquos logical to assume that easier goals are more likely to be accepted But oncean employee accepts a hard task he or she will exert a high level of effort until it is achieved loweredor abandoned(d) Reinforcement Theory A counterpoint to goal - setting theory is reinforcement theoryThe former is a cognitive approach proposing that and individualrsquos purposes direct his or her action Inreinforcement theory we have a behaviouristic approach which argues that reinforcement conditionsbehaviour Reinforcement theory ignores the inner state of the individual and concentrates solely onwhat happens to a person when he or she takes some action Because it does not concern itself withwhat initiates behaviour it is not strictly speaking a theory of motivation But it does provide a powerfulmeans of analysis of what controls behaviour and it is for this reason that it is typically considered indiscussions of motivation Employees might compare themselves to friends neighbours co-workerscolleagues in other organisations or past jobs they themselves have had Which referent an employeechooses will be influenced by the information the employee holds about referents as well as by theattractiveness of the referent This has led to focusing on four moderating variables - gender length oftenure level in the organisation and amount of education or professionalism Research shows that bothmen and women prefer same sex comparisons Based on equity theory when employees perceive an

inequity they can be presented to make one of six choices(e) Expectancy Theory Currently one of the most widely accepted explanations of motivation isVictor Vroomrsquos expectancy theory The theory therefore focuses on three relationships The strengthof a tendency to act in a certain way depends on the strength of an expectation that the act will befollowed by a given outcome and on the attractiveness of that outcome to the individual_ Effort-performance relationship The probability perceived by the individual that exerting agiven amount of effort would lead to performance_ Performance-reward relationship The degree to which the individual believes that performingat a particular level will lead to the attainment of a desired outcome_ Rewards-personal goals relationship The degree to which organisational rewards satisfy anindividualrsquos personal goals or needs and the attractiveness of those potential rewards for theindividual(f) The Porter-Lawler Model The Porter and Lawler expectancy model provides interestinginsights into the relationships between satisfaction and performance As illustrated here this modelpredicts that satisfaction is determined by the perceived equity of intrinsic and extrinsic rewards forperformance That is rather than satisfaction causing performance which many people might predictthis model argues that it is actually performance that eventually leads to satisfaction_ Determine the primary outcomes each employee wants_ Decide what levels and kinds of performance are needed to meet organizational goals_ Make sure the desired levels of performance are possible_ Link desired outcomes and desired performance_ Analyze the situation for conflicting expectancies_ Make sure the rewards are large enough_ Make sure the overall system is equitable for everyone(g) Equity Theory Equity theory recognizes that individuals are concerned not only with theabsolute amount of rewards they receive for their efforts but also with the relationship of this amountto what others receive The make judgements as to the relationship between their inputs and outcomesand the inputs and outcomes of others Based on onersquos inputs such as effort experience educationand competence one compares outcomes such as salary levels raises recognition and other factorsWhen people perceive an imbalance in their outcome-input ratio relative to others tension is createdThis tension provides the basis for motivation as people strive for what they perceive as equity andfairness Specifically the theory establishes four propositions relating to inequitable pay 1 Given payment by time over rewarded employees will produce more than will equitably paidemployees2 Given payment by quantity of production over rewarded employees will produce fewer buthigher quality units than will equitably paid employeesMotivation 993 Given payment by time under rewarded employees will produce less or poorer quality ofoutput4 Given payment by quantity of production under rewarded employees will produce a largenumber of low-quality units in comparison with equitably paid employeesIn conclusion equity theory demonstrates that for most employees motivation is influencedsignificantly by relative rewards as well as by absolute rewards but some key issues are still unclearFor instance how do employees handle conflicting equity signals such as when unions point to otheremployee groups who are substantially better off while management argues how much things haveimproved Yet regardless of these problems equity theory continues to offer us some importantinsights into employee motivation

MANAGING MOTIVATION AND CHANGEThe scope radical nature and fast rate of planned organizational change as as stated earlier beenunprecedented in recent times Mergers acquisitions strategic alliances reengineering and downsizingactivities have significantly taken off The extent to which these levels of organizational change willcontinue is uncertain however it has been predicated that organizational change will become a constantthat

is change will no longer be a single event Because information technologies are also changing thevery nature of work and expertise requirements employee motivation takes on an even greater importanceSeveral practices to enhance motivation in the contemporary workplace have been suggested _ Ensure that employeesrsquo motives and values are appropriate and ldquofitrdquo the jobs on which theyare placed_ Ensure that jobs roles and responsibilities are attractive and consistent with employeesrsquovalues beliefs and motives_ Assist employees and ensure that work goals are clear challenging attractive and attainable_ Provide employees with required personal and material resources that enhance theireffectiveness_ Create and sustain supportive social and working environments_ Recognize and reinforce performance and_ Ensure that the elements are harmonized and fit into a consistent sociotechnical organizationalsystemManaging motivation in rapidly and continuously changing organizational settings will requireflexibility focus experimentation the skill of balancing paradoxes openly communicating and testingassumptions and being open to and skilled in implementing planned change Motivation is to a largeextent culturally conditioned and learned Individual organization members working with those fromdifferent cultures should not assume when the topic is motivations whether it be needs expectanciesor satisfiers These individuals should find out what the basic cultural orientation is - whether it iscollectivist individuals productivity or quality of life oriented uncertainty avoidance or comfort withambiguity Not everyone from a culture shares all of its basic societal values but these values can and doinfluence unspoken beliefs attitudes and motivations A personrsquos own values or motivational assumptionand standards should not be accepted as absoluteThe characteristics of a changing ever-more diverse workforce suggests that managing motivationwill be challenging and difficult The challenge for owners managers and organization members will beto find ways to integrate not assimilate the diverse individuals and to address their motivational needsIntegrating and motivating a diverse workforce involves understanding and addressing value differencesValuing and motivating diverse workforces must be organizational priorities The scope radical natureand fast rate of planned organizational change in recent times have been unprecedented Several practiceshave been suggested to enhance motivation in the contemporary workplace These include ensuring thatemployeersquo motives and values are appropriate and fit the jobs in which they are placed that jobs rolesand responsibilities are attractive and consistent with employeesrsquo values beliefs and motives and thatwork goals are clear challenging attractive and attainable Other ways to enhance motivation includeproviding employees with required personal and material resources that enhance their effectivenesscreating and sustaining supportive social and working environments recognizing and reinforcingperformance and ensuring that these elements are harmonized and fit into a consistent socio-technicalorganizational system Managing motivation in rapidly and continuously changing organizational settingswill require flexibility focus experimentation the skill of balancing paradoxes openly communicatingand testing assumptions and being open to and skilled in implementing planned change MONEY AS A MOTIVATORThe widespread misconception about finance being a motivating factor or motivator in industry has ledto the failure of the best-laid incentive plans The Wire Meld company USA after a six week drive thecompany concluded that awarding war bonds to employees for perfect attendance was not the solutionto absenteeism Habits of the employees were not influenced by the plan Most of those who had beenirregular in attendance before the award system was inaugurated were irregular There was a bus slowdown in New York in it easy 1980rsquos due to the refusal of drivers (bus) to work overtime They were notinterested in more money They felt they were tired after duty to engage in extra work An analysis ofthese drivers indicated an average income of 3200 a year an income that even then could not beconsidered very highEver since Taylorrsquos time ldquoexpertsrdquo have concocted one wage incentive system after anotherresulting in a myriad of these Lytle (1938) gave one of the most comprehensive reviews of wageincentive plans He believed such plans were important in any cost production problem He cited two

advantages of wage incentive plans as being (1) an increase in production per unit (2) an increase inemployeesrsquo earnings He believed that the advantages of a well-installed and ably managed wage paymentplan accrue annually to employees and employers It is then difficult to demarcate (among) the variousincentive systems from the industrial psychologists point of view Lytlersquos attempt to classify all financialincentive plans on the basis of production earning characteristics is shown below Itrsquos an idea of thenumerous systems that have been promoted This is a historical method and is least used todayClass I Employee takes all gain or lossTime Hour week or any straight statuary rate not an extra incentiveStandard time using two rates one either side of the task a two zone multipletime planMultiple time With Arithmetic in rate between production zones (standard time plan)Multiple time Geometric steps in rate between production zonesClass II Employee takes all gainPiece or straight commission rate this sub divides into punitive basic andhigh etcClass III Gain shared between employer and employee but day wage guaranteedexception one-third premiumClass IV Empirical location of points between two variables piecework or commissionabove 100 productionMotivation 101Theories Concerning Money as an InentiveOpsahl and Dunnettee (1966) list 5 theories in this respect These attempt to explain the effect ormoney or job performancea Money as a generalised conditioned Reinforcer Money due to its association with morebasic reinforcers (need satisfiers) acquires the status of a secondary reinforcer Wolf studies (1936) andCowles (1937) demonstrated that poker chips acquired requirements value when they could be exchangedfor food ie subjects in their experiments worked as hard to get clops which could lsquobuyrsquo food as theyhad previously worked for food itselfb Money as a conditioning incentive Money acquires an incentive value due to continuedpairing with other incentives of a more basic nature Despite laboratory data this method is difficult topractice It is difficult to point out the more basic incentives with which money can be pairedc Money as an anxiety reducer The absence of money is generally associated with anxietyreactions in our society Therefore lack of money becomes a conditioned stimulus for an anxiety responseMoney therefore serves as a reducer of anxietyd Money as a ldquoHygiene Factorrdquo Herzberg Mausner and Synderman in their notion of satisfierand dissatisfies are viewed as being two distinct classes of motivators ldquoMoney is a hygiene factorwhich serves primarily as a dissatisfier ie causes dissatisfaction when absent but contributes a little tosatisfaction when present It is uncertain whether their data supports this hypothesis (Opsahl and Dunnette1966)e Money as a means of Instrumentality According to Vroomrsquos Theory of Motivation Modelmoney acquires valence due to its perceived instrumentality for obtaining the desired outcomes eg Ifmoney were perceived as being instrumental to the positive goal of security then money would acquirea positive valance Then the likelihood of a person acting in a way to acquire money would be a functionof his need for security multiplied by the expectancy that a particular money-seeking act would result ina specified monetary return A simple numerical explanation would beLm = f (s) times EwhereLm = Likelihood of a person acting in a way to acquire moneyS = Need for securityE = Expectancy that a particular money seeking act would result in a specifiedmonetary returnIn their review on the role of financial compensation in industrial motivation (Opsahl and Dunnette1966) state The role of money as reward in modern industry continues to be poorly understood despite

our economies being based on a monetary reward system Although the use of formal incentive paysystems has diminished in recent years in favour of other non-financial incentives money units willprobably always be exchanged for work Thus a better knowledge of the dynamics of this exchangeprocess is certainly neededKinds of IncentivesIncentives may be classified financial and non-financial More aptly co-operative and competitive(i) Co-operation Incentives This involves organising people into groups (meaningful groups)and having them work together for a common goal This is the latest of kinds of incentivesand is practiced in industry as well as educational institutions This results in more learning atthe educational level and greater production at the industrial level People contribute equal andmaximum efforts towards the realisation of common goal102 (ii) Competitive Incentives These involve the urge of doing better than the next individual(iii) Individual IncentivesThese are extremely meaningful if the individual himself introducesthem In industry the incentive is used as a means of spurring an employee towards someoneelsersquos goal He may not be interested in either reduced costs or increased production But hemay be persuaded to achieve his goal by an incentive when the incentive results in equalsatisfaction for the employer too when the plant is being successfully operated The majordifficulty with financial incentives has been the facts that fear of a rate cut-whether the fear isjustified or not They also fear a lay off Hence indifference or evasiveness to wage raisesBoth competition and co-operation are not mutually inclusive especially when individuals cooperatein-groups to compete with other groups Industry in the past has placed too much emphasis oncompetition only recently have the advantages of co-operative behaviour as an incentive been recognisedThe use of co-operation as an incentive holds considerable promise of successResearch on IncentivesA host of experts have attempted in divulge into the issue of incentives and it is conspicuous thateach one of them has endeavored to surpass their predecessor or rather improve on the previousstudies(a) Blum and Ruess Study In this study 5 drives were listed in an attempt to determine therelative importance of these five incentives on an employee in a job The data were obtained from 286gainfully employed people from 17-60 years of age and in occupation from unskilled manual labour tothe professionals there were 181 men 72 of whom were married and 105 women 26 of whom weremarried all subjects lived in New York city area A questionnaire was prepared aimed at comparing theemployeesrsquo incentive with the other four in all 10 comparisons Each time one incentive is compared tothe other in the comparison a score is assigned to it ie a maximum of ten points is distributed amongthe five incentives Then the scores were tabulated thus against the five incentives the purpose of thequestionnaire was not disclosed to the subject till after completing itFindingsIn this study they have measured the attitudes of employees toward time incentives at the paidtechnique it was found that_ Advancement and security were the most important_ Incentives hours of work were the least important_ Salary was rated third by men 4th women_ Supervisor relationships were ranked fourth by men and third by women_ Married men considered security more important and advancement less important than didsingle men_ Married women were more interested in working fewer hours than were the single women_ The significance of advancement as an incentive decreased with age for both sexes andsecurity became more important with age_ Advancement and security were considered more important than salary and_ The attitudes of the employees changed depending on such major classifications as sex maritalstatus and ageMotivation 103

(b) Jurgensen Study His study involved 150 females and 1189 male applicants for positions atthe Minnea Polis Gas Light Company Each subject was asked to rank ten items in order of preferenceFindingsJob Preferences were affected by the extent of Education than by most other variablesAdvancement became more important and security less important as education increasedAccording to his findings wages hours and working conditions are not so important as generallythought and the type of work is more important than is ordinarily stated(c) Stagner Study The study included 7000 employees of a Nationwide Corporation After viewingvarious researchers he concludes that neither executives nor workers are concerned about pay as suchexcept when economically pinched At other times they prefer ego-satisfactions such as prestigerecognition and individual treatment He rated the importance by 7000 workers on various job factors(d) Jones and Jeffrey Study This is a study which evaluated preferences among electricalworkers for alternate form of job compensation They considered each of four different compensationdimensions listed belowHourly wage versus weekly wageMerit incentive versus non-merit incentivePiecework incentive versus no piecework incentive andRegular pay rate versus high pay rateFindingsNon-union workers significantly preferred the weekly wage the merit incentive the pieceworkincentive and the higher wage Union Members were willing to take jobs with non-merit incentive andregular pay in preference to jobs having merit incentives with higher pay They would forfeit money tostay clear of a merit system This would certainly seem to argue that the union as an organisationprovides the workers with some form of ldquogroup protectionrdquo or security that is worth a sacrifice inactual money units He no longer has to bargain for himself but is part of a larger body which bargainsin much broader terms(e) Nealey Study He examined work preference for different employee benefit programmes Hehad 1133 members of an electrical trade union panel compare the following six-benefit option1 The company will pay the cost of an additional 50 a month pension to be added to retirementbenefit2 I will get a percent raise3 The normal workweek shall be cut to 375 hrs Without any reduction in weekly earnings4 The company will pay the entire costs of full medical insurance for my family and myself5 It will be agreed that all regular employees must be members of the union and6 I will have three weeks paid vacation in a year in addition to my present vacation to the extravacation to be taken when I chooseThe six plans were chosen so as to be of approximately equal cost to the employerIn general the workers preferred medical insurance option and the union were unimpressed withthe enticement of 375 hours week104 Major FindingsThere is a tremendous increase in preference for the pension plan as one moves into older age groupsThe union is judged the most desirable (relative to other plans) among the middle-aged workersThe 3-week additional vacation was most preferred on a move through the older groups(f) DudychandashNaylor Study (1966) The study was designed to examine what job characteristicswere of primary importance to todayrsquos college studentsFindingsStudents in their sample gave the following order of job traits1 Pay2 Opportunity for growth and advancement3 Security4 Fellow employees5 Working conditions and

6 Supervisor-employee relationsThese were students who for most part had never held regular job and who were indicating whatthings they felt would be important when they did start choosing between job opportunities Theyplaced high weight to pay(g) Maslowrsquos View on Financial Incentives Maslowrsquos theory of motivation dismisses financeas a motivator He argued that money satisfies only lower needs (safety and psychological needs) let thehigher order needIn one survey he found that when managers were asked what factors they felt determined theirpay they responded training and experience were the most important factors

Theory X and Theory Y Douglas McGregor (1960)Douglas McGregor and MIT psychologist proposed two sets of assumptions about humanmotivation that a manager can hold McGregor called the assumptions Theory X and Theory Y Amanagerrsquos behaviour toward his workers and his management style will differ based on the assumptionsguiding his behaviour10487661048766The average person dislikes working and will avoid it if possible10487661048766Because people dislike working they must be directed tightly controlled and pressured to getthem to work toward organizational goals10487661048766The average person wants security avoids responsibility and has little ambition and10487661048766McGregor believed that many managers held Theory X assumption about workers Suchmanagers give their workers little latitude closely supervise them and punish poor performanceThey use few rewards and typically give only negative feedbackThe Theory Y assumptions are as follows10487661048766The average person does not dislike work it is as natural as play10487661048766If a person is committed to a set he will work towards them without an external control10487661048766Goal commitment follows from the satisfaction of a personrsquos desire to achieve10487661048766The average person can learn to accept responsibility Lack of ambition is not a basic humancharacteristic10487661048766Creativity ingenuity and imagination are human characteristics that are widely dispersed inthe population and10487661048766Modern organizations only partially use and tap the potentialities of its workersManagers who hold Theory Y assumptions have a positive view of people believe they have muchhidden potential and that people will work toward organizational goals These managers will give workersmore job responsibility and reply on self-motivation more than coercion These two sets of differentassumptions reigned in the academic literature for many years They were widely understood by practicingmanagers Although called a theory they are not theories as described earlier They are assumptions orbeliefs about human motivation that can strongly affect management behaviourThe Twentieth Centuryrsquos Management Guru Peter F Drucker (1995)Austrian born Peter F Drucker ranks among the most widely read and widely quoted managementscholars of the twentieth century Drucker is a professor of management a Claremont College in Californiaa post he has held since 1971 He has written almost 30 books and continued his writing activity into thelate 1990s His 1954 book The Practice of Management launched him as a significant managementwriter Among his most lasting observations was his proposed philosophy of management by objectivesand self-control General Electric was the first company to adopt management by objectives (MBO) andput it into practice with Druckerrsquos help as a consultant Drucker has an insatiable appetite for statisticsHe examines them for a pattern often finds pattern that others miss Here are his predictions for eventsunfolding until about 201010487661048766A rise in alliance partnership and joint ventures on a global scale Technology will help linkthese parts of an emerging ldquoNetwork Societyrdquo10487661048766A compelling need for decentralized organizations in an increasing uncertain environment10487661048766A related increased in the use of teams in organizationsOverview of Organization Behaviour in the New Millennium 15

10487661048766An increase in the number of knowledge workers (for example computer technologists andmedical workers) and continual decline in the number of blue-collar and agricultural workersin all developed free-marked countries The knowledge workers will need continuous learninga characteristic with implications for educational systems10487661048766The twenty-first century will see the evolution of knowledge societies in developed countriesThese societies will have three sectors Business government and nonprofit The last is newand helps peoplersquos social development Nonprofit volunteer activities will characterize Englishspeakingcountries but appear fewer elsewhere and10487661048766An unquestionable forming of a world economy in which world markets will become moreimportant than domestic markets

and understanding of the nature of job satisfaction His theory was welcomed by managers because itmaintained that money is not a true motivator The great value of his work relied emphasis on recognitionopportunity for advancement and other factors for motivating people Although his theory was anextension of Maslowrsquos need-based theory it provided new look to the question of how to get employeesto perform in a more better way

Theory X and Theory YDouglas McGregor proposed two distinct views of human beings one basically negative labeledTheory X and the other basically positive labeled Theory Y After viewing the way in which managersdealt with employees McGregor concluded that a managerrsquos view of the nature of human beings is basedon a certain grouping of assumptions and that he or she tends to mold his or her behaviour towardsubordinates according to these assumptions as mentioned earlier in chapter1 In contrast to these negativeviews about the nature of human beings McGregor listed the four positive assumptions as describedearlier in chapter 1 that he called Theory YWhat are the motivational implications if you accept McGregorrsquosanalysis The answer is best expressed in the framework presented by Maslow Theory X assumes thatlower-order needs dominate individuals McGregor himself held to the belief that Theory Y assumptionswere more valid than Theory X Therefore he proposed such ideas as participative decision makingresponsible and challenging jobs and good group relations as approaches that would maximise an employeersquosjob motivation Unfortunately there is no evidence to confirm that either set of assumptions is valid or thataccepting Theory Y assumptions and altering onersquos actions accordingly will lead to more motivated workers

ERG TheoryClayton Alderfer of Yale University has reworked Maslowrsquos need hierarchy to align it more closelywith the empirical research His revised need hierarchy is labeled ERG theory Alderfer argues that thereare groups of core needmdashexistence relatedness and growthmdashhence the label ERG theory The existencegroup is concerned with providing our basic material existence requirements They include the itemsthat Maslow considered to be physiological and safety needs The second groups of needs are those ofrelatednessmdashthe desire we have for maintaining important interpersonal relationships These social andstatus desires require interaction with others if they are to be satisfied and they align with Maslowrsquossocial need and the external component of Maslowrsquos esteem classification Finally Alderfer isolatesgrowth needsmdashan intrinsic desire for personal development These include the intrinsic componentfrom Maslowrsquos esteem category and the characteristics included under self-actualisation

The ERG theory demonstrates that (1) more than one need may be operative at the same time andif the gratification of a higher - level need is stifled the desire to satisfy a lower - level need increasesERG theory also contains a frustration - regression dimension Maslow yoursquoll remember argued that anindividual would stay at a certain need level until that need was satisfied ERG theory counters by notingthat when a higher - order need level is frustrated the individualrsquos desire to increase a lower level needtakes place Inability to satisfy a need for social interaction for instance might increase the desire formore money or better working conditions So frustration chanced to a regression to a lower need ERGtheory is more consistent with our knowledge of individual differences among people Variables such aseducation family background and cultural environment can alter the importance or driving force that agroup of needs holds for a particular individual The evidence demonstrating that people in other culturesrank the need categories differently - for instance natives of Spain and Japan place social needs beforetheir physiological requirements would be consistent with ERG theory

McClellandrsquos Theory of NeedsMcClellandrsquos Theory of Needs was developed by David McClelland and his associates Thetheory focuses on three needs achievement power and affiliation They are defined as follows Needs for achievement The drive to excel to achieve in relation to a set of standards tostrive to succeedNeed for power The need to make others behave in a way that they would nothave behaved otherwise and

Need for affiliation The desire for friendly and close interpersonal relationshipsSome people have a compelling drive to succeed Theyrsquore striving for personal achievement ratherthan the rewards of success per se They have a desire to do something better or more efficiently thanit has been done before This drive is the achievement need From research into the achievement needMcClelland found that high achievers differentiate themselves from others by their desire to do thingsbetter They seek situations where they attain personal responsibility for finding solutions to problemswhere they can receive rapid feedback on their performance so they can tell easily whether they areimproving or not and where they can set moderately challenging goals High achievers are not gamblersthey dislike succeeding by chance They prefer the challenge of working at a problem and accepting thepersonal responsibility for success or failure rather than leaving the outcome to chance or the actions ofothers Importantly they avoid what they perceive to be very easy or very difficult tasks They want toovercome obstacles but they want to feel that their success is due to their own actions This meansthey like tasks of intermediate difficulty

Content Theories in PerspectiveThe five content theories of motivation we have discussed are summarized in Table Takentogether these theories challenge leaders managers and organizational members to the following_ Gain an understanding of their own needs and the needs of those with whom they work andmanagethe nature of the work_ Create learning environments that motivate the needs of individuals and terms to performmore effectively and with qualitySome of the commonalities of the four theories include a recognition of the role that human needsplay in organization satisfaction performance and growth and the distinction between lower-and higherlevelneeds Higher-level needs for Maslow include self-actualization esteem and belonging for Alderferthey are growth and relatedness for Herzberg motivational factors and for McClelland they areachievement and power There are important distinctions in the four theories Maslow held to a hierarchyof five needs Alderfer constructed a hierarchy of three needs with much more flexibility Herzberg usedtwo factors that did and did not motivate employees (eg dissatisfies) McClelland found that threeneeds common to all cultures he viewed all people as learned and capable of being taught Most of thesetheories lack sufficient empirical validation especially from a cross-cultural perspective but they are astarting point for discussing the role of human needs and motivation in the work place They can also beused to discover the effects of organizational change on individualrsquos needs and motivations Managerscan use the vocabulary and concepts of the content theories in employee interviews and dialogues toidentify development and training areas in which employee motivation can be improved

PROCESS THEORIES OF MOTIVATIONProcess theories use external variable to identify individual sources of motivation Whereas contenttheories deal with intrapersonal internal sources (ie needs) for motivation process theories includeperceived and actual exogenous workplace dimensions For example performance goals and tasksLearning Theory and MotivationLearning is an integral part of motivation for several reasons First expectations needs and responsesthat are motivating and demotivating are learned (or not learned) Understanding how we learn can assistorganization leaders and members in diagnosing motivational levels and finding ways to enhance themsecond since rewards and punishments are a vital part of human motivation understanding how peoplelearn to respond to rewards and punishments can assist organization leaders and managers in allocatingrewards more effectively Finally learning has taken on added importance in the process of ldquocontinuousimprovementrdquo Influenced by the Japanese concept of Kaizen (translated as ldquocontinuous improvementrdquo)which focuses not on ldquoquick fixesrdquo to problems or opportunities but on transformational incrementaland organization wide learning processes that enhance product and service quality many successfulcorporations practice Kaizen Learning how we learn is important to enable self-improvement(a) Behaviour Modification The basic tenet in the behaviour modification approach to learningis that to effect change behaviours must be addressed rather than their psychological inferences orcauses Behavioural modification specialists therefore approach human problems in organizational by

focussing on specific behaviours A five-step behavioural modification model addresses change asfollows Motivation 971 Identify and define specific behaviour (s) Can these be seen Can they be measured 2 Establish a baseline Before attempting to change the behaviour determine its strength in thepresent by measuring or counting the occurrences of the behaviour3 Analyze the A-BCs (antecedents behaviours consequences) of the behaviour to determinethe source of the problem4 Develop and implement an action plan using operant conditioning strengthen the desirablebehaviours and weaken or extinguish the undesirable one through conditioning techniques5 Evaluate the effects of the change using different measurements(b) Cognitive Evaluation Theory The introduction of extrinsic rewards such as pay For workeffort that had been previously intrinsically rewarding due to the pleasure associated with the content ofthe work itself would tend to decrease the overall level of motivation This proposal which has come tobe called the cognitive evaluation theory has been extensively researched and a large number ofstudies have been supportive Historically motivation theorists have generally assumed that intrinsicmotivations such as achievement responsibility and competence are independent of extrinsic motivatorslike high pay Promotions good supervisor relations and pleasant working conditions That is thestimulation of one would not affect the other But the cognitive evaluation theory suggests otherwise Itargues that when extrinsic rewards which are derived from individuals doing what they like are reducedIn other words when extrinsic rewards are given to someone for performing an interesting task itcauses intrinsic interest in the task itself to decline The theory may have limited applicability to workorganisations because most low-level jobs are not inherently satisfying enough to foster high intrinsicinterest and many managerial and professional positions offer intrinsic rewards Cognitive evaluationtheory may be relevant to that set of organisational jobs that falls in between - those that are neitherextremely dull nor extremely interesting(c) Goal-Setting Theory Gene Broadwater coach of the Hamilton High School Cross-countryteam gave his squad these last words before they approached the line for the league championship raceldquoEach one of you is physically ready Now get out there and do your best No one can ever ask more ofyou than thatrdquo In the late 1960s Edwin Locke proposed that intentions to work toward a goal are amajor source of work motivation That is goals tell an employee what needs to be done and how mucheffort will need to be expended The evidence strongly supports the value of goals More to the pointwe can say that specific goals increase performance that difficult goals when accepted result in higherperformance than do easy goals and that feedback leads to higher performance than does non-feedbackSpecific hard goals produce a higher level of output than does the generalized goal of ldquodo your bestrdquoThe specificity of the goal itself acts as an internal stimulus If factors like ability and acceptance of thegoals are held constant we can also state that the more difficult the goal the higher the level ofperformance However itrsquos logical to assume that easier goals are more likely to be accepted But oncean employee accepts a hard task he or she will exert a high level of effort until it is achieved loweredor abandoned(d) Reinforcement Theory A counterpoint to goal - setting theory is reinforcement theoryThe former is a cognitive approach proposing that and individualrsquos purposes direct his or her action Inreinforcement theory we have a behaviouristic approach which argues that reinforcement conditionsbehaviour Reinforcement theory ignores the inner state of the individual and concentrates solely onwhat happens to a person when he or she takes some action Because it does not concern itself withwhat initiates behaviour it is not strictly speaking a theory of motivation But it does provide a powerfulmeans of analysis of what controls behaviour and it is for this reason that it is typically considered indiscussions of motivation Employees might compare themselves to friends neighbours co-workerscolleagues in other organisations or past jobs they themselves have had Which referent an employeechooses will be influenced by the information the employee holds about referents as well as by theattractiveness of the referent This has led to focusing on four moderating variables - gender length oftenure level in the organisation and amount of education or professionalism Research shows that bothmen and women prefer same sex comparisons Based on equity theory when employees perceive an

inequity they can be presented to make one of six choices(e) Expectancy Theory Currently one of the most widely accepted explanations of motivation isVictor Vroomrsquos expectancy theory The theory therefore focuses on three relationships The strengthof a tendency to act in a certain way depends on the strength of an expectation that the act will befollowed by a given outcome and on the attractiveness of that outcome to the individual_ Effort-performance relationship The probability perceived by the individual that exerting agiven amount of effort would lead to performance_ Performance-reward relationship The degree to which the individual believes that performingat a particular level will lead to the attainment of a desired outcome_ Rewards-personal goals relationship The degree to which organisational rewards satisfy anindividualrsquos personal goals or needs and the attractiveness of those potential rewards for theindividual(f) The Porter-Lawler Model The Porter and Lawler expectancy model provides interestinginsights into the relationships between satisfaction and performance As illustrated here this modelpredicts that satisfaction is determined by the perceived equity of intrinsic and extrinsic rewards forperformance That is rather than satisfaction causing performance which many people might predictthis model argues that it is actually performance that eventually leads to satisfaction_ Determine the primary outcomes each employee wants_ Decide what levels and kinds of performance are needed to meet organizational goals_ Make sure the desired levels of performance are possible_ Link desired outcomes and desired performance_ Analyze the situation for conflicting expectancies_ Make sure the rewards are large enough_ Make sure the overall system is equitable for everyone(g) Equity Theory Equity theory recognizes that individuals are concerned not only with theabsolute amount of rewards they receive for their efforts but also with the relationship of this amountto what others receive The make judgements as to the relationship between their inputs and outcomesand the inputs and outcomes of others Based on onersquos inputs such as effort experience educationand competence one compares outcomes such as salary levels raises recognition and other factorsWhen people perceive an imbalance in their outcome-input ratio relative to others tension is createdThis tension provides the basis for motivation as people strive for what they perceive as equity andfairness Specifically the theory establishes four propositions relating to inequitable pay 1 Given payment by time over rewarded employees will produce more than will equitably paidemployees2 Given payment by quantity of production over rewarded employees will produce fewer buthigher quality units than will equitably paid employeesMotivation 993 Given payment by time under rewarded employees will produce less or poorer quality ofoutput4 Given payment by quantity of production under rewarded employees will produce a largenumber of low-quality units in comparison with equitably paid employeesIn conclusion equity theory demonstrates that for most employees motivation is influencedsignificantly by relative rewards as well as by absolute rewards but some key issues are still unclearFor instance how do employees handle conflicting equity signals such as when unions point to otheremployee groups who are substantially better off while management argues how much things haveimproved Yet regardless of these problems equity theory continues to offer us some importantinsights into employee motivation

MANAGING MOTIVATION AND CHANGEThe scope radical nature and fast rate of planned organizational change as as stated earlier beenunprecedented in recent times Mergers acquisitions strategic alliances reengineering and downsizingactivities have significantly taken off The extent to which these levels of organizational change willcontinue is uncertain however it has been predicated that organizational change will become a constantthat

is change will no longer be a single event Because information technologies are also changing thevery nature of work and expertise requirements employee motivation takes on an even greater importanceSeveral practices to enhance motivation in the contemporary workplace have been suggested _ Ensure that employeesrsquo motives and values are appropriate and ldquofitrdquo the jobs on which theyare placed_ Ensure that jobs roles and responsibilities are attractive and consistent with employeesrsquovalues beliefs and motives_ Assist employees and ensure that work goals are clear challenging attractive and attainable_ Provide employees with required personal and material resources that enhance theireffectiveness_ Create and sustain supportive social and working environments_ Recognize and reinforce performance and_ Ensure that the elements are harmonized and fit into a consistent sociotechnical organizationalsystemManaging motivation in rapidly and continuously changing organizational settings will requireflexibility focus experimentation the skill of balancing paradoxes openly communicating and testingassumptions and being open to and skilled in implementing planned change Motivation is to a largeextent culturally conditioned and learned Individual organization members working with those fromdifferent cultures should not assume when the topic is motivations whether it be needs expectanciesor satisfiers These individuals should find out what the basic cultural orientation is - whether it iscollectivist individuals productivity or quality of life oriented uncertainty avoidance or comfort withambiguity Not everyone from a culture shares all of its basic societal values but these values can and doinfluence unspoken beliefs attitudes and motivations A personrsquos own values or motivational assumptionand standards should not be accepted as absoluteThe characteristics of a changing ever-more diverse workforce suggests that managing motivationwill be challenging and difficult The challenge for owners managers and organization members will beto find ways to integrate not assimilate the diverse individuals and to address their motivational needsIntegrating and motivating a diverse workforce involves understanding and addressing value differencesValuing and motivating diverse workforces must be organizational priorities The scope radical natureand fast rate of planned organizational change in recent times have been unprecedented Several practiceshave been suggested to enhance motivation in the contemporary workplace These include ensuring thatemployeersquo motives and values are appropriate and fit the jobs in which they are placed that jobs rolesand responsibilities are attractive and consistent with employeesrsquo values beliefs and motives and thatwork goals are clear challenging attractive and attainable Other ways to enhance motivation includeproviding employees with required personal and material resources that enhance their effectivenesscreating and sustaining supportive social and working environments recognizing and reinforcingperformance and ensuring that these elements are harmonized and fit into a consistent socio-technicalorganizational system Managing motivation in rapidly and continuously changing organizational settingswill require flexibility focus experimentation the skill of balancing paradoxes openly communicatingand testing assumptions and being open to and skilled in implementing planned change MONEY AS A MOTIVATORThe widespread misconception about finance being a motivating factor or motivator in industry has ledto the failure of the best-laid incentive plans The Wire Meld company USA after a six week drive thecompany concluded that awarding war bonds to employees for perfect attendance was not the solutionto absenteeism Habits of the employees were not influenced by the plan Most of those who had beenirregular in attendance before the award system was inaugurated were irregular There was a bus slowdown in New York in it easy 1980rsquos due to the refusal of drivers (bus) to work overtime They were notinterested in more money They felt they were tired after duty to engage in extra work An analysis ofthese drivers indicated an average income of 3200 a year an income that even then could not beconsidered very highEver since Taylorrsquos time ldquoexpertsrdquo have concocted one wage incentive system after anotherresulting in a myriad of these Lytle (1938) gave one of the most comprehensive reviews of wageincentive plans He believed such plans were important in any cost production problem He cited two

advantages of wage incentive plans as being (1) an increase in production per unit (2) an increase inemployeesrsquo earnings He believed that the advantages of a well-installed and ably managed wage paymentplan accrue annually to employees and employers It is then difficult to demarcate (among) the variousincentive systems from the industrial psychologists point of view Lytlersquos attempt to classify all financialincentive plans on the basis of production earning characteristics is shown below Itrsquos an idea of thenumerous systems that have been promoted This is a historical method and is least used todayClass I Employee takes all gain or lossTime Hour week or any straight statuary rate not an extra incentiveStandard time using two rates one either side of the task a two zone multipletime planMultiple time With Arithmetic in rate between production zones (standard time plan)Multiple time Geometric steps in rate between production zonesClass II Employee takes all gainPiece or straight commission rate this sub divides into punitive basic andhigh etcClass III Gain shared between employer and employee but day wage guaranteedexception one-third premiumClass IV Empirical location of points between two variables piecework or commissionabove 100 productionMotivation 101Theories Concerning Money as an InentiveOpsahl and Dunnettee (1966) list 5 theories in this respect These attempt to explain the effect ormoney or job performancea Money as a generalised conditioned Reinforcer Money due to its association with morebasic reinforcers (need satisfiers) acquires the status of a secondary reinforcer Wolf studies (1936) andCowles (1937) demonstrated that poker chips acquired requirements value when they could be exchangedfor food ie subjects in their experiments worked as hard to get clops which could lsquobuyrsquo food as theyhad previously worked for food itselfb Money as a conditioning incentive Money acquires an incentive value due to continuedpairing with other incentives of a more basic nature Despite laboratory data this method is difficult topractice It is difficult to point out the more basic incentives with which money can be pairedc Money as an anxiety reducer The absence of money is generally associated with anxietyreactions in our society Therefore lack of money becomes a conditioned stimulus for an anxiety responseMoney therefore serves as a reducer of anxietyd Money as a ldquoHygiene Factorrdquo Herzberg Mausner and Synderman in their notion of satisfierand dissatisfies are viewed as being two distinct classes of motivators ldquoMoney is a hygiene factorwhich serves primarily as a dissatisfier ie causes dissatisfaction when absent but contributes a little tosatisfaction when present It is uncertain whether their data supports this hypothesis (Opsahl and Dunnette1966)e Money as a means of Instrumentality According to Vroomrsquos Theory of Motivation Modelmoney acquires valence due to its perceived instrumentality for obtaining the desired outcomes eg Ifmoney were perceived as being instrumental to the positive goal of security then money would acquirea positive valance Then the likelihood of a person acting in a way to acquire money would be a functionof his need for security multiplied by the expectancy that a particular money-seeking act would result ina specified monetary return A simple numerical explanation would beLm = f (s) times EwhereLm = Likelihood of a person acting in a way to acquire moneyS = Need for securityE = Expectancy that a particular money seeking act would result in a specifiedmonetary returnIn their review on the role of financial compensation in industrial motivation (Opsahl and Dunnette1966) state The role of money as reward in modern industry continues to be poorly understood despite

our economies being based on a monetary reward system Although the use of formal incentive paysystems has diminished in recent years in favour of other non-financial incentives money units willprobably always be exchanged for work Thus a better knowledge of the dynamics of this exchangeprocess is certainly neededKinds of IncentivesIncentives may be classified financial and non-financial More aptly co-operative and competitive(i) Co-operation Incentives This involves organising people into groups (meaningful groups)and having them work together for a common goal This is the latest of kinds of incentivesand is practiced in industry as well as educational institutions This results in more learning atthe educational level and greater production at the industrial level People contribute equal andmaximum efforts towards the realisation of common goal102 (ii) Competitive Incentives These involve the urge of doing better than the next individual(iii) Individual IncentivesThese are extremely meaningful if the individual himself introducesthem In industry the incentive is used as a means of spurring an employee towards someoneelsersquos goal He may not be interested in either reduced costs or increased production But hemay be persuaded to achieve his goal by an incentive when the incentive results in equalsatisfaction for the employer too when the plant is being successfully operated The majordifficulty with financial incentives has been the facts that fear of a rate cut-whether the fear isjustified or not They also fear a lay off Hence indifference or evasiveness to wage raisesBoth competition and co-operation are not mutually inclusive especially when individuals cooperatein-groups to compete with other groups Industry in the past has placed too much emphasis oncompetition only recently have the advantages of co-operative behaviour as an incentive been recognisedThe use of co-operation as an incentive holds considerable promise of successResearch on IncentivesA host of experts have attempted in divulge into the issue of incentives and it is conspicuous thateach one of them has endeavored to surpass their predecessor or rather improve on the previousstudies(a) Blum and Ruess Study In this study 5 drives were listed in an attempt to determine therelative importance of these five incentives on an employee in a job The data were obtained from 286gainfully employed people from 17-60 years of age and in occupation from unskilled manual labour tothe professionals there were 181 men 72 of whom were married and 105 women 26 of whom weremarried all subjects lived in New York city area A questionnaire was prepared aimed at comparing theemployeesrsquo incentive with the other four in all 10 comparisons Each time one incentive is compared tothe other in the comparison a score is assigned to it ie a maximum of ten points is distributed amongthe five incentives Then the scores were tabulated thus against the five incentives the purpose of thequestionnaire was not disclosed to the subject till after completing itFindingsIn this study they have measured the attitudes of employees toward time incentives at the paidtechnique it was found that_ Advancement and security were the most important_ Incentives hours of work were the least important_ Salary was rated third by men 4th women_ Supervisor relationships were ranked fourth by men and third by women_ Married men considered security more important and advancement less important than didsingle men_ Married women were more interested in working fewer hours than were the single women_ The significance of advancement as an incentive decreased with age for both sexes andsecurity became more important with age_ Advancement and security were considered more important than salary and_ The attitudes of the employees changed depending on such major classifications as sex maritalstatus and ageMotivation 103

(b) Jurgensen Study His study involved 150 females and 1189 male applicants for positions atthe Minnea Polis Gas Light Company Each subject was asked to rank ten items in order of preferenceFindingsJob Preferences were affected by the extent of Education than by most other variablesAdvancement became more important and security less important as education increasedAccording to his findings wages hours and working conditions are not so important as generallythought and the type of work is more important than is ordinarily stated(c) Stagner Study The study included 7000 employees of a Nationwide Corporation After viewingvarious researchers he concludes that neither executives nor workers are concerned about pay as suchexcept when economically pinched At other times they prefer ego-satisfactions such as prestigerecognition and individual treatment He rated the importance by 7000 workers on various job factors(d) Jones and Jeffrey Study This is a study which evaluated preferences among electricalworkers for alternate form of job compensation They considered each of four different compensationdimensions listed belowHourly wage versus weekly wageMerit incentive versus non-merit incentivePiecework incentive versus no piecework incentive andRegular pay rate versus high pay rateFindingsNon-union workers significantly preferred the weekly wage the merit incentive the pieceworkincentive and the higher wage Union Members were willing to take jobs with non-merit incentive andregular pay in preference to jobs having merit incentives with higher pay They would forfeit money tostay clear of a merit system This would certainly seem to argue that the union as an organisationprovides the workers with some form of ldquogroup protectionrdquo or security that is worth a sacrifice inactual money units He no longer has to bargain for himself but is part of a larger body which bargainsin much broader terms(e) Nealey Study He examined work preference for different employee benefit programmes Hehad 1133 members of an electrical trade union panel compare the following six-benefit option1 The company will pay the cost of an additional 50 a month pension to be added to retirementbenefit2 I will get a percent raise3 The normal workweek shall be cut to 375 hrs Without any reduction in weekly earnings4 The company will pay the entire costs of full medical insurance for my family and myself5 It will be agreed that all regular employees must be members of the union and6 I will have three weeks paid vacation in a year in addition to my present vacation to the extravacation to be taken when I chooseThe six plans were chosen so as to be of approximately equal cost to the employerIn general the workers preferred medical insurance option and the union were unimpressed withthe enticement of 375 hours week104 Major FindingsThere is a tremendous increase in preference for the pension plan as one moves into older age groupsThe union is judged the most desirable (relative to other plans) among the middle-aged workersThe 3-week additional vacation was most preferred on a move through the older groups(f) DudychandashNaylor Study (1966) The study was designed to examine what job characteristicswere of primary importance to todayrsquos college studentsFindingsStudents in their sample gave the following order of job traits1 Pay2 Opportunity for growth and advancement3 Security4 Fellow employees5 Working conditions and

6 Supervisor-employee relationsThese were students who for most part had never held regular job and who were indicating whatthings they felt would be important when they did start choosing between job opportunities Theyplaced high weight to pay(g) Maslowrsquos View on Financial Incentives Maslowrsquos theory of motivation dismisses financeas a motivator He argued that money satisfies only lower needs (safety and psychological needs) let thehigher order needIn one survey he found that when managers were asked what factors they felt determined theirpay they responded training and experience were the most important factors

Theory X and Theory Y Douglas McGregor (1960)Douglas McGregor and MIT psychologist proposed two sets of assumptions about humanmotivation that a manager can hold McGregor called the assumptions Theory X and Theory Y Amanagerrsquos behaviour toward his workers and his management style will differ based on the assumptionsguiding his behaviour10487661048766The average person dislikes working and will avoid it if possible10487661048766Because people dislike working they must be directed tightly controlled and pressured to getthem to work toward organizational goals10487661048766The average person wants security avoids responsibility and has little ambition and10487661048766McGregor believed that many managers held Theory X assumption about workers Suchmanagers give their workers little latitude closely supervise them and punish poor performanceThey use few rewards and typically give only negative feedbackThe Theory Y assumptions are as follows10487661048766The average person does not dislike work it is as natural as play10487661048766If a person is committed to a set he will work towards them without an external control10487661048766Goal commitment follows from the satisfaction of a personrsquos desire to achieve10487661048766The average person can learn to accept responsibility Lack of ambition is not a basic humancharacteristic10487661048766Creativity ingenuity and imagination are human characteristics that are widely dispersed inthe population and10487661048766Modern organizations only partially use and tap the potentialities of its workersManagers who hold Theory Y assumptions have a positive view of people believe they have muchhidden potential and that people will work toward organizational goals These managers will give workersmore job responsibility and reply on self-motivation more than coercion These two sets of differentassumptions reigned in the academic literature for many years They were widely understood by practicingmanagers Although called a theory they are not theories as described earlier They are assumptions orbeliefs about human motivation that can strongly affect management behaviourThe Twentieth Centuryrsquos Management Guru Peter F Drucker (1995)Austrian born Peter F Drucker ranks among the most widely read and widely quoted managementscholars of the twentieth century Drucker is a professor of management a Claremont College in Californiaa post he has held since 1971 He has written almost 30 books and continued his writing activity into thelate 1990s His 1954 book The Practice of Management launched him as a significant managementwriter Among his most lasting observations was his proposed philosophy of management by objectivesand self-control General Electric was the first company to adopt management by objectives (MBO) andput it into practice with Druckerrsquos help as a consultant Drucker has an insatiable appetite for statisticsHe examines them for a pattern often finds pattern that others miss Here are his predictions for eventsunfolding until about 201010487661048766A rise in alliance partnership and joint ventures on a global scale Technology will help linkthese parts of an emerging ldquoNetwork Societyrdquo10487661048766A compelling need for decentralized organizations in an increasing uncertain environment10487661048766A related increased in the use of teams in organizationsOverview of Organization Behaviour in the New Millennium 15

10487661048766An increase in the number of knowledge workers (for example computer technologists andmedical workers) and continual decline in the number of blue-collar and agricultural workersin all developed free-marked countries The knowledge workers will need continuous learninga characteristic with implications for educational systems10487661048766The twenty-first century will see the evolution of knowledge societies in developed countriesThese societies will have three sectors Business government and nonprofit The last is newand helps peoplersquos social development Nonprofit volunteer activities will characterize Englishspeakingcountries but appear fewer elsewhere and10487661048766An unquestionable forming of a world economy in which world markets will become moreimportant than domestic markets

Need for affiliation The desire for friendly and close interpersonal relationshipsSome people have a compelling drive to succeed Theyrsquore striving for personal achievement ratherthan the rewards of success per se They have a desire to do something better or more efficiently thanit has been done before This drive is the achievement need From research into the achievement needMcClelland found that high achievers differentiate themselves from others by their desire to do thingsbetter They seek situations where they attain personal responsibility for finding solutions to problemswhere they can receive rapid feedback on their performance so they can tell easily whether they areimproving or not and where they can set moderately challenging goals High achievers are not gamblersthey dislike succeeding by chance They prefer the challenge of working at a problem and accepting thepersonal responsibility for success or failure rather than leaving the outcome to chance or the actions ofothers Importantly they avoid what they perceive to be very easy or very difficult tasks They want toovercome obstacles but they want to feel that their success is due to their own actions This meansthey like tasks of intermediate difficulty

Content Theories in PerspectiveThe five content theories of motivation we have discussed are summarized in Table Takentogether these theories challenge leaders managers and organizational members to the following_ Gain an understanding of their own needs and the needs of those with whom they work andmanagethe nature of the work_ Create learning environments that motivate the needs of individuals and terms to performmore effectively and with qualitySome of the commonalities of the four theories include a recognition of the role that human needsplay in organization satisfaction performance and growth and the distinction between lower-and higherlevelneeds Higher-level needs for Maslow include self-actualization esteem and belonging for Alderferthey are growth and relatedness for Herzberg motivational factors and for McClelland they areachievement and power There are important distinctions in the four theories Maslow held to a hierarchyof five needs Alderfer constructed a hierarchy of three needs with much more flexibility Herzberg usedtwo factors that did and did not motivate employees (eg dissatisfies) McClelland found that threeneeds common to all cultures he viewed all people as learned and capable of being taught Most of thesetheories lack sufficient empirical validation especially from a cross-cultural perspective but they are astarting point for discussing the role of human needs and motivation in the work place They can also beused to discover the effects of organizational change on individualrsquos needs and motivations Managerscan use the vocabulary and concepts of the content theories in employee interviews and dialogues toidentify development and training areas in which employee motivation can be improved

PROCESS THEORIES OF MOTIVATIONProcess theories use external variable to identify individual sources of motivation Whereas contenttheories deal with intrapersonal internal sources (ie needs) for motivation process theories includeperceived and actual exogenous workplace dimensions For example performance goals and tasksLearning Theory and MotivationLearning is an integral part of motivation for several reasons First expectations needs and responsesthat are motivating and demotivating are learned (or not learned) Understanding how we learn can assistorganization leaders and members in diagnosing motivational levels and finding ways to enhance themsecond since rewards and punishments are a vital part of human motivation understanding how peoplelearn to respond to rewards and punishments can assist organization leaders and managers in allocatingrewards more effectively Finally learning has taken on added importance in the process of ldquocontinuousimprovementrdquo Influenced by the Japanese concept of Kaizen (translated as ldquocontinuous improvementrdquo)which focuses not on ldquoquick fixesrdquo to problems or opportunities but on transformational incrementaland organization wide learning processes that enhance product and service quality many successfulcorporations practice Kaizen Learning how we learn is important to enable self-improvement(a) Behaviour Modification The basic tenet in the behaviour modification approach to learningis that to effect change behaviours must be addressed rather than their psychological inferences orcauses Behavioural modification specialists therefore approach human problems in organizational by

focussing on specific behaviours A five-step behavioural modification model addresses change asfollows Motivation 971 Identify and define specific behaviour (s) Can these be seen Can they be measured 2 Establish a baseline Before attempting to change the behaviour determine its strength in thepresent by measuring or counting the occurrences of the behaviour3 Analyze the A-BCs (antecedents behaviours consequences) of the behaviour to determinethe source of the problem4 Develop and implement an action plan using operant conditioning strengthen the desirablebehaviours and weaken or extinguish the undesirable one through conditioning techniques5 Evaluate the effects of the change using different measurements(b) Cognitive Evaluation Theory The introduction of extrinsic rewards such as pay For workeffort that had been previously intrinsically rewarding due to the pleasure associated with the content ofthe work itself would tend to decrease the overall level of motivation This proposal which has come tobe called the cognitive evaluation theory has been extensively researched and a large number ofstudies have been supportive Historically motivation theorists have generally assumed that intrinsicmotivations such as achievement responsibility and competence are independent of extrinsic motivatorslike high pay Promotions good supervisor relations and pleasant working conditions That is thestimulation of one would not affect the other But the cognitive evaluation theory suggests otherwise Itargues that when extrinsic rewards which are derived from individuals doing what they like are reducedIn other words when extrinsic rewards are given to someone for performing an interesting task itcauses intrinsic interest in the task itself to decline The theory may have limited applicability to workorganisations because most low-level jobs are not inherently satisfying enough to foster high intrinsicinterest and many managerial and professional positions offer intrinsic rewards Cognitive evaluationtheory may be relevant to that set of organisational jobs that falls in between - those that are neitherextremely dull nor extremely interesting(c) Goal-Setting Theory Gene Broadwater coach of the Hamilton High School Cross-countryteam gave his squad these last words before they approached the line for the league championship raceldquoEach one of you is physically ready Now get out there and do your best No one can ever ask more ofyou than thatrdquo In the late 1960s Edwin Locke proposed that intentions to work toward a goal are amajor source of work motivation That is goals tell an employee what needs to be done and how mucheffort will need to be expended The evidence strongly supports the value of goals More to the pointwe can say that specific goals increase performance that difficult goals when accepted result in higherperformance than do easy goals and that feedback leads to higher performance than does non-feedbackSpecific hard goals produce a higher level of output than does the generalized goal of ldquodo your bestrdquoThe specificity of the goal itself acts as an internal stimulus If factors like ability and acceptance of thegoals are held constant we can also state that the more difficult the goal the higher the level ofperformance However itrsquos logical to assume that easier goals are more likely to be accepted But oncean employee accepts a hard task he or she will exert a high level of effort until it is achieved loweredor abandoned(d) Reinforcement Theory A counterpoint to goal - setting theory is reinforcement theoryThe former is a cognitive approach proposing that and individualrsquos purposes direct his or her action Inreinforcement theory we have a behaviouristic approach which argues that reinforcement conditionsbehaviour Reinforcement theory ignores the inner state of the individual and concentrates solely onwhat happens to a person when he or she takes some action Because it does not concern itself withwhat initiates behaviour it is not strictly speaking a theory of motivation But it does provide a powerfulmeans of analysis of what controls behaviour and it is for this reason that it is typically considered indiscussions of motivation Employees might compare themselves to friends neighbours co-workerscolleagues in other organisations or past jobs they themselves have had Which referent an employeechooses will be influenced by the information the employee holds about referents as well as by theattractiveness of the referent This has led to focusing on four moderating variables - gender length oftenure level in the organisation and amount of education or professionalism Research shows that bothmen and women prefer same sex comparisons Based on equity theory when employees perceive an

inequity they can be presented to make one of six choices(e) Expectancy Theory Currently one of the most widely accepted explanations of motivation isVictor Vroomrsquos expectancy theory The theory therefore focuses on three relationships The strengthof a tendency to act in a certain way depends on the strength of an expectation that the act will befollowed by a given outcome and on the attractiveness of that outcome to the individual_ Effort-performance relationship The probability perceived by the individual that exerting agiven amount of effort would lead to performance_ Performance-reward relationship The degree to which the individual believes that performingat a particular level will lead to the attainment of a desired outcome_ Rewards-personal goals relationship The degree to which organisational rewards satisfy anindividualrsquos personal goals or needs and the attractiveness of those potential rewards for theindividual(f) The Porter-Lawler Model The Porter and Lawler expectancy model provides interestinginsights into the relationships between satisfaction and performance As illustrated here this modelpredicts that satisfaction is determined by the perceived equity of intrinsic and extrinsic rewards forperformance That is rather than satisfaction causing performance which many people might predictthis model argues that it is actually performance that eventually leads to satisfaction_ Determine the primary outcomes each employee wants_ Decide what levels and kinds of performance are needed to meet organizational goals_ Make sure the desired levels of performance are possible_ Link desired outcomes and desired performance_ Analyze the situation for conflicting expectancies_ Make sure the rewards are large enough_ Make sure the overall system is equitable for everyone(g) Equity Theory Equity theory recognizes that individuals are concerned not only with theabsolute amount of rewards they receive for their efforts but also with the relationship of this amountto what others receive The make judgements as to the relationship between their inputs and outcomesand the inputs and outcomes of others Based on onersquos inputs such as effort experience educationand competence one compares outcomes such as salary levels raises recognition and other factorsWhen people perceive an imbalance in their outcome-input ratio relative to others tension is createdThis tension provides the basis for motivation as people strive for what they perceive as equity andfairness Specifically the theory establishes four propositions relating to inequitable pay 1 Given payment by time over rewarded employees will produce more than will equitably paidemployees2 Given payment by quantity of production over rewarded employees will produce fewer buthigher quality units than will equitably paid employeesMotivation 993 Given payment by time under rewarded employees will produce less or poorer quality ofoutput4 Given payment by quantity of production under rewarded employees will produce a largenumber of low-quality units in comparison with equitably paid employeesIn conclusion equity theory demonstrates that for most employees motivation is influencedsignificantly by relative rewards as well as by absolute rewards but some key issues are still unclearFor instance how do employees handle conflicting equity signals such as when unions point to otheremployee groups who are substantially better off while management argues how much things haveimproved Yet regardless of these problems equity theory continues to offer us some importantinsights into employee motivation

MANAGING MOTIVATION AND CHANGEThe scope radical nature and fast rate of planned organizational change as as stated earlier beenunprecedented in recent times Mergers acquisitions strategic alliances reengineering and downsizingactivities have significantly taken off The extent to which these levels of organizational change willcontinue is uncertain however it has been predicated that organizational change will become a constantthat

is change will no longer be a single event Because information technologies are also changing thevery nature of work and expertise requirements employee motivation takes on an even greater importanceSeveral practices to enhance motivation in the contemporary workplace have been suggested _ Ensure that employeesrsquo motives and values are appropriate and ldquofitrdquo the jobs on which theyare placed_ Ensure that jobs roles and responsibilities are attractive and consistent with employeesrsquovalues beliefs and motives_ Assist employees and ensure that work goals are clear challenging attractive and attainable_ Provide employees with required personal and material resources that enhance theireffectiveness_ Create and sustain supportive social and working environments_ Recognize and reinforce performance and_ Ensure that the elements are harmonized and fit into a consistent sociotechnical organizationalsystemManaging motivation in rapidly and continuously changing organizational settings will requireflexibility focus experimentation the skill of balancing paradoxes openly communicating and testingassumptions and being open to and skilled in implementing planned change Motivation is to a largeextent culturally conditioned and learned Individual organization members working with those fromdifferent cultures should not assume when the topic is motivations whether it be needs expectanciesor satisfiers These individuals should find out what the basic cultural orientation is - whether it iscollectivist individuals productivity or quality of life oriented uncertainty avoidance or comfort withambiguity Not everyone from a culture shares all of its basic societal values but these values can and doinfluence unspoken beliefs attitudes and motivations A personrsquos own values or motivational assumptionand standards should not be accepted as absoluteThe characteristics of a changing ever-more diverse workforce suggests that managing motivationwill be challenging and difficult The challenge for owners managers and organization members will beto find ways to integrate not assimilate the diverse individuals and to address their motivational needsIntegrating and motivating a diverse workforce involves understanding and addressing value differencesValuing and motivating diverse workforces must be organizational priorities The scope radical natureand fast rate of planned organizational change in recent times have been unprecedented Several practiceshave been suggested to enhance motivation in the contemporary workplace These include ensuring thatemployeersquo motives and values are appropriate and fit the jobs in which they are placed that jobs rolesand responsibilities are attractive and consistent with employeesrsquo values beliefs and motives and thatwork goals are clear challenging attractive and attainable Other ways to enhance motivation includeproviding employees with required personal and material resources that enhance their effectivenesscreating and sustaining supportive social and working environments recognizing and reinforcingperformance and ensuring that these elements are harmonized and fit into a consistent socio-technicalorganizational system Managing motivation in rapidly and continuously changing organizational settingswill require flexibility focus experimentation the skill of balancing paradoxes openly communicatingand testing assumptions and being open to and skilled in implementing planned change MONEY AS A MOTIVATORThe widespread misconception about finance being a motivating factor or motivator in industry has ledto the failure of the best-laid incentive plans The Wire Meld company USA after a six week drive thecompany concluded that awarding war bonds to employees for perfect attendance was not the solutionto absenteeism Habits of the employees were not influenced by the plan Most of those who had beenirregular in attendance before the award system was inaugurated were irregular There was a bus slowdown in New York in it easy 1980rsquos due to the refusal of drivers (bus) to work overtime They were notinterested in more money They felt they were tired after duty to engage in extra work An analysis ofthese drivers indicated an average income of 3200 a year an income that even then could not beconsidered very highEver since Taylorrsquos time ldquoexpertsrdquo have concocted one wage incentive system after anotherresulting in a myriad of these Lytle (1938) gave one of the most comprehensive reviews of wageincentive plans He believed such plans were important in any cost production problem He cited two

advantages of wage incentive plans as being (1) an increase in production per unit (2) an increase inemployeesrsquo earnings He believed that the advantages of a well-installed and ably managed wage paymentplan accrue annually to employees and employers It is then difficult to demarcate (among) the variousincentive systems from the industrial psychologists point of view Lytlersquos attempt to classify all financialincentive plans on the basis of production earning characteristics is shown below Itrsquos an idea of thenumerous systems that have been promoted This is a historical method and is least used todayClass I Employee takes all gain or lossTime Hour week or any straight statuary rate not an extra incentiveStandard time using two rates one either side of the task a two zone multipletime planMultiple time With Arithmetic in rate between production zones (standard time plan)Multiple time Geometric steps in rate between production zonesClass II Employee takes all gainPiece or straight commission rate this sub divides into punitive basic andhigh etcClass III Gain shared between employer and employee but day wage guaranteedexception one-third premiumClass IV Empirical location of points between two variables piecework or commissionabove 100 productionMotivation 101Theories Concerning Money as an InentiveOpsahl and Dunnettee (1966) list 5 theories in this respect These attempt to explain the effect ormoney or job performancea Money as a generalised conditioned Reinforcer Money due to its association with morebasic reinforcers (need satisfiers) acquires the status of a secondary reinforcer Wolf studies (1936) andCowles (1937) demonstrated that poker chips acquired requirements value when they could be exchangedfor food ie subjects in their experiments worked as hard to get clops which could lsquobuyrsquo food as theyhad previously worked for food itselfb Money as a conditioning incentive Money acquires an incentive value due to continuedpairing with other incentives of a more basic nature Despite laboratory data this method is difficult topractice It is difficult to point out the more basic incentives with which money can be pairedc Money as an anxiety reducer The absence of money is generally associated with anxietyreactions in our society Therefore lack of money becomes a conditioned stimulus for an anxiety responseMoney therefore serves as a reducer of anxietyd Money as a ldquoHygiene Factorrdquo Herzberg Mausner and Synderman in their notion of satisfierand dissatisfies are viewed as being two distinct classes of motivators ldquoMoney is a hygiene factorwhich serves primarily as a dissatisfier ie causes dissatisfaction when absent but contributes a little tosatisfaction when present It is uncertain whether their data supports this hypothesis (Opsahl and Dunnette1966)e Money as a means of Instrumentality According to Vroomrsquos Theory of Motivation Modelmoney acquires valence due to its perceived instrumentality for obtaining the desired outcomes eg Ifmoney were perceived as being instrumental to the positive goal of security then money would acquirea positive valance Then the likelihood of a person acting in a way to acquire money would be a functionof his need for security multiplied by the expectancy that a particular money-seeking act would result ina specified monetary return A simple numerical explanation would beLm = f (s) times EwhereLm = Likelihood of a person acting in a way to acquire moneyS = Need for securityE = Expectancy that a particular money seeking act would result in a specifiedmonetary returnIn their review on the role of financial compensation in industrial motivation (Opsahl and Dunnette1966) state The role of money as reward in modern industry continues to be poorly understood despite

our economies being based on a monetary reward system Although the use of formal incentive paysystems has diminished in recent years in favour of other non-financial incentives money units willprobably always be exchanged for work Thus a better knowledge of the dynamics of this exchangeprocess is certainly neededKinds of IncentivesIncentives may be classified financial and non-financial More aptly co-operative and competitive(i) Co-operation Incentives This involves organising people into groups (meaningful groups)and having them work together for a common goal This is the latest of kinds of incentivesand is practiced in industry as well as educational institutions This results in more learning atthe educational level and greater production at the industrial level People contribute equal andmaximum efforts towards the realisation of common goal102 (ii) Competitive Incentives These involve the urge of doing better than the next individual(iii) Individual IncentivesThese are extremely meaningful if the individual himself introducesthem In industry the incentive is used as a means of spurring an employee towards someoneelsersquos goal He may not be interested in either reduced costs or increased production But hemay be persuaded to achieve his goal by an incentive when the incentive results in equalsatisfaction for the employer too when the plant is being successfully operated The majordifficulty with financial incentives has been the facts that fear of a rate cut-whether the fear isjustified or not They also fear a lay off Hence indifference or evasiveness to wage raisesBoth competition and co-operation are not mutually inclusive especially when individuals cooperatein-groups to compete with other groups Industry in the past has placed too much emphasis oncompetition only recently have the advantages of co-operative behaviour as an incentive been recognisedThe use of co-operation as an incentive holds considerable promise of successResearch on IncentivesA host of experts have attempted in divulge into the issue of incentives and it is conspicuous thateach one of them has endeavored to surpass their predecessor or rather improve on the previousstudies(a) Blum and Ruess Study In this study 5 drives were listed in an attempt to determine therelative importance of these five incentives on an employee in a job The data were obtained from 286gainfully employed people from 17-60 years of age and in occupation from unskilled manual labour tothe professionals there were 181 men 72 of whom were married and 105 women 26 of whom weremarried all subjects lived in New York city area A questionnaire was prepared aimed at comparing theemployeesrsquo incentive with the other four in all 10 comparisons Each time one incentive is compared tothe other in the comparison a score is assigned to it ie a maximum of ten points is distributed amongthe five incentives Then the scores were tabulated thus against the five incentives the purpose of thequestionnaire was not disclosed to the subject till after completing itFindingsIn this study they have measured the attitudes of employees toward time incentives at the paidtechnique it was found that_ Advancement and security were the most important_ Incentives hours of work were the least important_ Salary was rated third by men 4th women_ Supervisor relationships were ranked fourth by men and third by women_ Married men considered security more important and advancement less important than didsingle men_ Married women were more interested in working fewer hours than were the single women_ The significance of advancement as an incentive decreased with age for both sexes andsecurity became more important with age_ Advancement and security were considered more important than salary and_ The attitudes of the employees changed depending on such major classifications as sex maritalstatus and ageMotivation 103

(b) Jurgensen Study His study involved 150 females and 1189 male applicants for positions atthe Minnea Polis Gas Light Company Each subject was asked to rank ten items in order of preferenceFindingsJob Preferences were affected by the extent of Education than by most other variablesAdvancement became more important and security less important as education increasedAccording to his findings wages hours and working conditions are not so important as generallythought and the type of work is more important than is ordinarily stated(c) Stagner Study The study included 7000 employees of a Nationwide Corporation After viewingvarious researchers he concludes that neither executives nor workers are concerned about pay as suchexcept when economically pinched At other times they prefer ego-satisfactions such as prestigerecognition and individual treatment He rated the importance by 7000 workers on various job factors(d) Jones and Jeffrey Study This is a study which evaluated preferences among electricalworkers for alternate form of job compensation They considered each of four different compensationdimensions listed belowHourly wage versus weekly wageMerit incentive versus non-merit incentivePiecework incentive versus no piecework incentive andRegular pay rate versus high pay rateFindingsNon-union workers significantly preferred the weekly wage the merit incentive the pieceworkincentive and the higher wage Union Members were willing to take jobs with non-merit incentive andregular pay in preference to jobs having merit incentives with higher pay They would forfeit money tostay clear of a merit system This would certainly seem to argue that the union as an organisationprovides the workers with some form of ldquogroup protectionrdquo or security that is worth a sacrifice inactual money units He no longer has to bargain for himself but is part of a larger body which bargainsin much broader terms(e) Nealey Study He examined work preference for different employee benefit programmes Hehad 1133 members of an electrical trade union panel compare the following six-benefit option1 The company will pay the cost of an additional 50 a month pension to be added to retirementbenefit2 I will get a percent raise3 The normal workweek shall be cut to 375 hrs Without any reduction in weekly earnings4 The company will pay the entire costs of full medical insurance for my family and myself5 It will be agreed that all regular employees must be members of the union and6 I will have three weeks paid vacation in a year in addition to my present vacation to the extravacation to be taken when I chooseThe six plans were chosen so as to be of approximately equal cost to the employerIn general the workers preferred medical insurance option and the union were unimpressed withthe enticement of 375 hours week104 Major FindingsThere is a tremendous increase in preference for the pension plan as one moves into older age groupsThe union is judged the most desirable (relative to other plans) among the middle-aged workersThe 3-week additional vacation was most preferred on a move through the older groups(f) DudychandashNaylor Study (1966) The study was designed to examine what job characteristicswere of primary importance to todayrsquos college studentsFindingsStudents in their sample gave the following order of job traits1 Pay2 Opportunity for growth and advancement3 Security4 Fellow employees5 Working conditions and

6 Supervisor-employee relationsThese were students who for most part had never held regular job and who were indicating whatthings they felt would be important when they did start choosing between job opportunities Theyplaced high weight to pay(g) Maslowrsquos View on Financial Incentives Maslowrsquos theory of motivation dismisses financeas a motivator He argued that money satisfies only lower needs (safety and psychological needs) let thehigher order needIn one survey he found that when managers were asked what factors they felt determined theirpay they responded training and experience were the most important factors

Theory X and Theory Y Douglas McGregor (1960)Douglas McGregor and MIT psychologist proposed two sets of assumptions about humanmotivation that a manager can hold McGregor called the assumptions Theory X and Theory Y Amanagerrsquos behaviour toward his workers and his management style will differ based on the assumptionsguiding his behaviour10487661048766The average person dislikes working and will avoid it if possible10487661048766Because people dislike working they must be directed tightly controlled and pressured to getthem to work toward organizational goals10487661048766The average person wants security avoids responsibility and has little ambition and10487661048766McGregor believed that many managers held Theory X assumption about workers Suchmanagers give their workers little latitude closely supervise them and punish poor performanceThey use few rewards and typically give only negative feedbackThe Theory Y assumptions are as follows10487661048766The average person does not dislike work it is as natural as play10487661048766If a person is committed to a set he will work towards them without an external control10487661048766Goal commitment follows from the satisfaction of a personrsquos desire to achieve10487661048766The average person can learn to accept responsibility Lack of ambition is not a basic humancharacteristic10487661048766Creativity ingenuity and imagination are human characteristics that are widely dispersed inthe population and10487661048766Modern organizations only partially use and tap the potentialities of its workersManagers who hold Theory Y assumptions have a positive view of people believe they have muchhidden potential and that people will work toward organizational goals These managers will give workersmore job responsibility and reply on self-motivation more than coercion These two sets of differentassumptions reigned in the academic literature for many years They were widely understood by practicingmanagers Although called a theory they are not theories as described earlier They are assumptions orbeliefs about human motivation that can strongly affect management behaviourThe Twentieth Centuryrsquos Management Guru Peter F Drucker (1995)Austrian born Peter F Drucker ranks among the most widely read and widely quoted managementscholars of the twentieth century Drucker is a professor of management a Claremont College in Californiaa post he has held since 1971 He has written almost 30 books and continued his writing activity into thelate 1990s His 1954 book The Practice of Management launched him as a significant managementwriter Among his most lasting observations was his proposed philosophy of management by objectivesand self-control General Electric was the first company to adopt management by objectives (MBO) andput it into practice with Druckerrsquos help as a consultant Drucker has an insatiable appetite for statisticsHe examines them for a pattern often finds pattern that others miss Here are his predictions for eventsunfolding until about 201010487661048766A rise in alliance partnership and joint ventures on a global scale Technology will help linkthese parts of an emerging ldquoNetwork Societyrdquo10487661048766A compelling need for decentralized organizations in an increasing uncertain environment10487661048766A related increased in the use of teams in organizationsOverview of Organization Behaviour in the New Millennium 15

10487661048766An increase in the number of knowledge workers (for example computer technologists andmedical workers) and continual decline in the number of blue-collar and agricultural workersin all developed free-marked countries The knowledge workers will need continuous learninga characteristic with implications for educational systems10487661048766The twenty-first century will see the evolution of knowledge societies in developed countriesThese societies will have three sectors Business government and nonprofit The last is newand helps peoplersquos social development Nonprofit volunteer activities will characterize Englishspeakingcountries but appear fewer elsewhere and10487661048766An unquestionable forming of a world economy in which world markets will become moreimportant than domestic markets

focussing on specific behaviours A five-step behavioural modification model addresses change asfollows Motivation 971 Identify and define specific behaviour (s) Can these be seen Can they be measured 2 Establish a baseline Before attempting to change the behaviour determine its strength in thepresent by measuring or counting the occurrences of the behaviour3 Analyze the A-BCs (antecedents behaviours consequences) of the behaviour to determinethe source of the problem4 Develop and implement an action plan using operant conditioning strengthen the desirablebehaviours and weaken or extinguish the undesirable one through conditioning techniques5 Evaluate the effects of the change using different measurements(b) Cognitive Evaluation Theory The introduction of extrinsic rewards such as pay For workeffort that had been previously intrinsically rewarding due to the pleasure associated with the content ofthe work itself would tend to decrease the overall level of motivation This proposal which has come tobe called the cognitive evaluation theory has been extensively researched and a large number ofstudies have been supportive Historically motivation theorists have generally assumed that intrinsicmotivations such as achievement responsibility and competence are independent of extrinsic motivatorslike high pay Promotions good supervisor relations and pleasant working conditions That is thestimulation of one would not affect the other But the cognitive evaluation theory suggests otherwise Itargues that when extrinsic rewards which are derived from individuals doing what they like are reducedIn other words when extrinsic rewards are given to someone for performing an interesting task itcauses intrinsic interest in the task itself to decline The theory may have limited applicability to workorganisations because most low-level jobs are not inherently satisfying enough to foster high intrinsicinterest and many managerial and professional positions offer intrinsic rewards Cognitive evaluationtheory may be relevant to that set of organisational jobs that falls in between - those that are neitherextremely dull nor extremely interesting(c) Goal-Setting Theory Gene Broadwater coach of the Hamilton High School Cross-countryteam gave his squad these last words before they approached the line for the league championship raceldquoEach one of you is physically ready Now get out there and do your best No one can ever ask more ofyou than thatrdquo In the late 1960s Edwin Locke proposed that intentions to work toward a goal are amajor source of work motivation That is goals tell an employee what needs to be done and how mucheffort will need to be expended The evidence strongly supports the value of goals More to the pointwe can say that specific goals increase performance that difficult goals when accepted result in higherperformance than do easy goals and that feedback leads to higher performance than does non-feedbackSpecific hard goals produce a higher level of output than does the generalized goal of ldquodo your bestrdquoThe specificity of the goal itself acts as an internal stimulus If factors like ability and acceptance of thegoals are held constant we can also state that the more difficult the goal the higher the level ofperformance However itrsquos logical to assume that easier goals are more likely to be accepted But oncean employee accepts a hard task he or she will exert a high level of effort until it is achieved loweredor abandoned(d) Reinforcement Theory A counterpoint to goal - setting theory is reinforcement theoryThe former is a cognitive approach proposing that and individualrsquos purposes direct his or her action Inreinforcement theory we have a behaviouristic approach which argues that reinforcement conditionsbehaviour Reinforcement theory ignores the inner state of the individual and concentrates solely onwhat happens to a person when he or she takes some action Because it does not concern itself withwhat initiates behaviour it is not strictly speaking a theory of motivation But it does provide a powerfulmeans of analysis of what controls behaviour and it is for this reason that it is typically considered indiscussions of motivation Employees might compare themselves to friends neighbours co-workerscolleagues in other organisations or past jobs they themselves have had Which referent an employeechooses will be influenced by the information the employee holds about referents as well as by theattractiveness of the referent This has led to focusing on four moderating variables - gender length oftenure level in the organisation and amount of education or professionalism Research shows that bothmen and women prefer same sex comparisons Based on equity theory when employees perceive an

inequity they can be presented to make one of six choices(e) Expectancy Theory Currently one of the most widely accepted explanations of motivation isVictor Vroomrsquos expectancy theory The theory therefore focuses on three relationships The strengthof a tendency to act in a certain way depends on the strength of an expectation that the act will befollowed by a given outcome and on the attractiveness of that outcome to the individual_ Effort-performance relationship The probability perceived by the individual that exerting agiven amount of effort would lead to performance_ Performance-reward relationship The degree to which the individual believes that performingat a particular level will lead to the attainment of a desired outcome_ Rewards-personal goals relationship The degree to which organisational rewards satisfy anindividualrsquos personal goals or needs and the attractiveness of those potential rewards for theindividual(f) The Porter-Lawler Model The Porter and Lawler expectancy model provides interestinginsights into the relationships between satisfaction and performance As illustrated here this modelpredicts that satisfaction is determined by the perceived equity of intrinsic and extrinsic rewards forperformance That is rather than satisfaction causing performance which many people might predictthis model argues that it is actually performance that eventually leads to satisfaction_ Determine the primary outcomes each employee wants_ Decide what levels and kinds of performance are needed to meet organizational goals_ Make sure the desired levels of performance are possible_ Link desired outcomes and desired performance_ Analyze the situation for conflicting expectancies_ Make sure the rewards are large enough_ Make sure the overall system is equitable for everyone(g) Equity Theory Equity theory recognizes that individuals are concerned not only with theabsolute amount of rewards they receive for their efforts but also with the relationship of this amountto what others receive The make judgements as to the relationship between their inputs and outcomesand the inputs and outcomes of others Based on onersquos inputs such as effort experience educationand competence one compares outcomes such as salary levels raises recognition and other factorsWhen people perceive an imbalance in their outcome-input ratio relative to others tension is createdThis tension provides the basis for motivation as people strive for what they perceive as equity andfairness Specifically the theory establishes four propositions relating to inequitable pay 1 Given payment by time over rewarded employees will produce more than will equitably paidemployees2 Given payment by quantity of production over rewarded employees will produce fewer buthigher quality units than will equitably paid employeesMotivation 993 Given payment by time under rewarded employees will produce less or poorer quality ofoutput4 Given payment by quantity of production under rewarded employees will produce a largenumber of low-quality units in comparison with equitably paid employeesIn conclusion equity theory demonstrates that for most employees motivation is influencedsignificantly by relative rewards as well as by absolute rewards but some key issues are still unclearFor instance how do employees handle conflicting equity signals such as when unions point to otheremployee groups who are substantially better off while management argues how much things haveimproved Yet regardless of these problems equity theory continues to offer us some importantinsights into employee motivation

MANAGING MOTIVATION AND CHANGEThe scope radical nature and fast rate of planned organizational change as as stated earlier beenunprecedented in recent times Mergers acquisitions strategic alliances reengineering and downsizingactivities have significantly taken off The extent to which these levels of organizational change willcontinue is uncertain however it has been predicated that organizational change will become a constantthat

is change will no longer be a single event Because information technologies are also changing thevery nature of work and expertise requirements employee motivation takes on an even greater importanceSeveral practices to enhance motivation in the contemporary workplace have been suggested _ Ensure that employeesrsquo motives and values are appropriate and ldquofitrdquo the jobs on which theyare placed_ Ensure that jobs roles and responsibilities are attractive and consistent with employeesrsquovalues beliefs and motives_ Assist employees and ensure that work goals are clear challenging attractive and attainable_ Provide employees with required personal and material resources that enhance theireffectiveness_ Create and sustain supportive social and working environments_ Recognize and reinforce performance and_ Ensure that the elements are harmonized and fit into a consistent sociotechnical organizationalsystemManaging motivation in rapidly and continuously changing organizational settings will requireflexibility focus experimentation the skill of balancing paradoxes openly communicating and testingassumptions and being open to and skilled in implementing planned change Motivation is to a largeextent culturally conditioned and learned Individual organization members working with those fromdifferent cultures should not assume when the topic is motivations whether it be needs expectanciesor satisfiers These individuals should find out what the basic cultural orientation is - whether it iscollectivist individuals productivity or quality of life oriented uncertainty avoidance or comfort withambiguity Not everyone from a culture shares all of its basic societal values but these values can and doinfluence unspoken beliefs attitudes and motivations A personrsquos own values or motivational assumptionand standards should not be accepted as absoluteThe characteristics of a changing ever-more diverse workforce suggests that managing motivationwill be challenging and difficult The challenge for owners managers and organization members will beto find ways to integrate not assimilate the diverse individuals and to address their motivational needsIntegrating and motivating a diverse workforce involves understanding and addressing value differencesValuing and motivating diverse workforces must be organizational priorities The scope radical natureand fast rate of planned organizational change in recent times have been unprecedented Several practiceshave been suggested to enhance motivation in the contemporary workplace These include ensuring thatemployeersquo motives and values are appropriate and fit the jobs in which they are placed that jobs rolesand responsibilities are attractive and consistent with employeesrsquo values beliefs and motives and thatwork goals are clear challenging attractive and attainable Other ways to enhance motivation includeproviding employees with required personal and material resources that enhance their effectivenesscreating and sustaining supportive social and working environments recognizing and reinforcingperformance and ensuring that these elements are harmonized and fit into a consistent socio-technicalorganizational system Managing motivation in rapidly and continuously changing organizational settingswill require flexibility focus experimentation the skill of balancing paradoxes openly communicatingand testing assumptions and being open to and skilled in implementing planned change MONEY AS A MOTIVATORThe widespread misconception about finance being a motivating factor or motivator in industry has ledto the failure of the best-laid incentive plans The Wire Meld company USA after a six week drive thecompany concluded that awarding war bonds to employees for perfect attendance was not the solutionto absenteeism Habits of the employees were not influenced by the plan Most of those who had beenirregular in attendance before the award system was inaugurated were irregular There was a bus slowdown in New York in it easy 1980rsquos due to the refusal of drivers (bus) to work overtime They were notinterested in more money They felt they were tired after duty to engage in extra work An analysis ofthese drivers indicated an average income of 3200 a year an income that even then could not beconsidered very highEver since Taylorrsquos time ldquoexpertsrdquo have concocted one wage incentive system after anotherresulting in a myriad of these Lytle (1938) gave one of the most comprehensive reviews of wageincentive plans He believed such plans were important in any cost production problem He cited two

advantages of wage incentive plans as being (1) an increase in production per unit (2) an increase inemployeesrsquo earnings He believed that the advantages of a well-installed and ably managed wage paymentplan accrue annually to employees and employers It is then difficult to demarcate (among) the variousincentive systems from the industrial psychologists point of view Lytlersquos attempt to classify all financialincentive plans on the basis of production earning characteristics is shown below Itrsquos an idea of thenumerous systems that have been promoted This is a historical method and is least used todayClass I Employee takes all gain or lossTime Hour week or any straight statuary rate not an extra incentiveStandard time using two rates one either side of the task a two zone multipletime planMultiple time With Arithmetic in rate between production zones (standard time plan)Multiple time Geometric steps in rate between production zonesClass II Employee takes all gainPiece or straight commission rate this sub divides into punitive basic andhigh etcClass III Gain shared between employer and employee but day wage guaranteedexception one-third premiumClass IV Empirical location of points between two variables piecework or commissionabove 100 productionMotivation 101Theories Concerning Money as an InentiveOpsahl and Dunnettee (1966) list 5 theories in this respect These attempt to explain the effect ormoney or job performancea Money as a generalised conditioned Reinforcer Money due to its association with morebasic reinforcers (need satisfiers) acquires the status of a secondary reinforcer Wolf studies (1936) andCowles (1937) demonstrated that poker chips acquired requirements value when they could be exchangedfor food ie subjects in their experiments worked as hard to get clops which could lsquobuyrsquo food as theyhad previously worked for food itselfb Money as a conditioning incentive Money acquires an incentive value due to continuedpairing with other incentives of a more basic nature Despite laboratory data this method is difficult topractice It is difficult to point out the more basic incentives with which money can be pairedc Money as an anxiety reducer The absence of money is generally associated with anxietyreactions in our society Therefore lack of money becomes a conditioned stimulus for an anxiety responseMoney therefore serves as a reducer of anxietyd Money as a ldquoHygiene Factorrdquo Herzberg Mausner and Synderman in their notion of satisfierand dissatisfies are viewed as being two distinct classes of motivators ldquoMoney is a hygiene factorwhich serves primarily as a dissatisfier ie causes dissatisfaction when absent but contributes a little tosatisfaction when present It is uncertain whether their data supports this hypothesis (Opsahl and Dunnette1966)e Money as a means of Instrumentality According to Vroomrsquos Theory of Motivation Modelmoney acquires valence due to its perceived instrumentality for obtaining the desired outcomes eg Ifmoney were perceived as being instrumental to the positive goal of security then money would acquirea positive valance Then the likelihood of a person acting in a way to acquire money would be a functionof his need for security multiplied by the expectancy that a particular money-seeking act would result ina specified monetary return A simple numerical explanation would beLm = f (s) times EwhereLm = Likelihood of a person acting in a way to acquire moneyS = Need for securityE = Expectancy that a particular money seeking act would result in a specifiedmonetary returnIn their review on the role of financial compensation in industrial motivation (Opsahl and Dunnette1966) state The role of money as reward in modern industry continues to be poorly understood despite

our economies being based on a monetary reward system Although the use of formal incentive paysystems has diminished in recent years in favour of other non-financial incentives money units willprobably always be exchanged for work Thus a better knowledge of the dynamics of this exchangeprocess is certainly neededKinds of IncentivesIncentives may be classified financial and non-financial More aptly co-operative and competitive(i) Co-operation Incentives This involves organising people into groups (meaningful groups)and having them work together for a common goal This is the latest of kinds of incentivesand is practiced in industry as well as educational institutions This results in more learning atthe educational level and greater production at the industrial level People contribute equal andmaximum efforts towards the realisation of common goal102 (ii) Competitive Incentives These involve the urge of doing better than the next individual(iii) Individual IncentivesThese are extremely meaningful if the individual himself introducesthem In industry the incentive is used as a means of spurring an employee towards someoneelsersquos goal He may not be interested in either reduced costs or increased production But hemay be persuaded to achieve his goal by an incentive when the incentive results in equalsatisfaction for the employer too when the plant is being successfully operated The majordifficulty with financial incentives has been the facts that fear of a rate cut-whether the fear isjustified or not They also fear a lay off Hence indifference or evasiveness to wage raisesBoth competition and co-operation are not mutually inclusive especially when individuals cooperatein-groups to compete with other groups Industry in the past has placed too much emphasis oncompetition only recently have the advantages of co-operative behaviour as an incentive been recognisedThe use of co-operation as an incentive holds considerable promise of successResearch on IncentivesA host of experts have attempted in divulge into the issue of incentives and it is conspicuous thateach one of them has endeavored to surpass their predecessor or rather improve on the previousstudies(a) Blum and Ruess Study In this study 5 drives were listed in an attempt to determine therelative importance of these five incentives on an employee in a job The data were obtained from 286gainfully employed people from 17-60 years of age and in occupation from unskilled manual labour tothe professionals there were 181 men 72 of whom were married and 105 women 26 of whom weremarried all subjects lived in New York city area A questionnaire was prepared aimed at comparing theemployeesrsquo incentive with the other four in all 10 comparisons Each time one incentive is compared tothe other in the comparison a score is assigned to it ie a maximum of ten points is distributed amongthe five incentives Then the scores were tabulated thus against the five incentives the purpose of thequestionnaire was not disclosed to the subject till after completing itFindingsIn this study they have measured the attitudes of employees toward time incentives at the paidtechnique it was found that_ Advancement and security were the most important_ Incentives hours of work were the least important_ Salary was rated third by men 4th women_ Supervisor relationships were ranked fourth by men and third by women_ Married men considered security more important and advancement less important than didsingle men_ Married women were more interested in working fewer hours than were the single women_ The significance of advancement as an incentive decreased with age for both sexes andsecurity became more important with age_ Advancement and security were considered more important than salary and_ The attitudes of the employees changed depending on such major classifications as sex maritalstatus and ageMotivation 103

(b) Jurgensen Study His study involved 150 females and 1189 male applicants for positions atthe Minnea Polis Gas Light Company Each subject was asked to rank ten items in order of preferenceFindingsJob Preferences were affected by the extent of Education than by most other variablesAdvancement became more important and security less important as education increasedAccording to his findings wages hours and working conditions are not so important as generallythought and the type of work is more important than is ordinarily stated(c) Stagner Study The study included 7000 employees of a Nationwide Corporation After viewingvarious researchers he concludes that neither executives nor workers are concerned about pay as suchexcept when economically pinched At other times they prefer ego-satisfactions such as prestigerecognition and individual treatment He rated the importance by 7000 workers on various job factors(d) Jones and Jeffrey Study This is a study which evaluated preferences among electricalworkers for alternate form of job compensation They considered each of four different compensationdimensions listed belowHourly wage versus weekly wageMerit incentive versus non-merit incentivePiecework incentive versus no piecework incentive andRegular pay rate versus high pay rateFindingsNon-union workers significantly preferred the weekly wage the merit incentive the pieceworkincentive and the higher wage Union Members were willing to take jobs with non-merit incentive andregular pay in preference to jobs having merit incentives with higher pay They would forfeit money tostay clear of a merit system This would certainly seem to argue that the union as an organisationprovides the workers with some form of ldquogroup protectionrdquo or security that is worth a sacrifice inactual money units He no longer has to bargain for himself but is part of a larger body which bargainsin much broader terms(e) Nealey Study He examined work preference for different employee benefit programmes Hehad 1133 members of an electrical trade union panel compare the following six-benefit option1 The company will pay the cost of an additional 50 a month pension to be added to retirementbenefit2 I will get a percent raise3 The normal workweek shall be cut to 375 hrs Without any reduction in weekly earnings4 The company will pay the entire costs of full medical insurance for my family and myself5 It will be agreed that all regular employees must be members of the union and6 I will have three weeks paid vacation in a year in addition to my present vacation to the extravacation to be taken when I chooseThe six plans were chosen so as to be of approximately equal cost to the employerIn general the workers preferred medical insurance option and the union were unimpressed withthe enticement of 375 hours week104 Major FindingsThere is a tremendous increase in preference for the pension plan as one moves into older age groupsThe union is judged the most desirable (relative to other plans) among the middle-aged workersThe 3-week additional vacation was most preferred on a move through the older groups(f) DudychandashNaylor Study (1966) The study was designed to examine what job characteristicswere of primary importance to todayrsquos college studentsFindingsStudents in their sample gave the following order of job traits1 Pay2 Opportunity for growth and advancement3 Security4 Fellow employees5 Working conditions and

6 Supervisor-employee relationsThese were students who for most part had never held regular job and who were indicating whatthings they felt would be important when they did start choosing between job opportunities Theyplaced high weight to pay(g) Maslowrsquos View on Financial Incentives Maslowrsquos theory of motivation dismisses financeas a motivator He argued that money satisfies only lower needs (safety and psychological needs) let thehigher order needIn one survey he found that when managers were asked what factors they felt determined theirpay they responded training and experience were the most important factors

Theory X and Theory Y Douglas McGregor (1960)Douglas McGregor and MIT psychologist proposed two sets of assumptions about humanmotivation that a manager can hold McGregor called the assumptions Theory X and Theory Y Amanagerrsquos behaviour toward his workers and his management style will differ based on the assumptionsguiding his behaviour10487661048766The average person dislikes working and will avoid it if possible10487661048766Because people dislike working they must be directed tightly controlled and pressured to getthem to work toward organizational goals10487661048766The average person wants security avoids responsibility and has little ambition and10487661048766McGregor believed that many managers held Theory X assumption about workers Suchmanagers give their workers little latitude closely supervise them and punish poor performanceThey use few rewards and typically give only negative feedbackThe Theory Y assumptions are as follows10487661048766The average person does not dislike work it is as natural as play10487661048766If a person is committed to a set he will work towards them without an external control10487661048766Goal commitment follows from the satisfaction of a personrsquos desire to achieve10487661048766The average person can learn to accept responsibility Lack of ambition is not a basic humancharacteristic10487661048766Creativity ingenuity and imagination are human characteristics that are widely dispersed inthe population and10487661048766Modern organizations only partially use and tap the potentialities of its workersManagers who hold Theory Y assumptions have a positive view of people believe they have muchhidden potential and that people will work toward organizational goals These managers will give workersmore job responsibility and reply on self-motivation more than coercion These two sets of differentassumptions reigned in the academic literature for many years They were widely understood by practicingmanagers Although called a theory they are not theories as described earlier They are assumptions orbeliefs about human motivation that can strongly affect management behaviourThe Twentieth Centuryrsquos Management Guru Peter F Drucker (1995)Austrian born Peter F Drucker ranks among the most widely read and widely quoted managementscholars of the twentieth century Drucker is a professor of management a Claremont College in Californiaa post he has held since 1971 He has written almost 30 books and continued his writing activity into thelate 1990s His 1954 book The Practice of Management launched him as a significant managementwriter Among his most lasting observations was his proposed philosophy of management by objectivesand self-control General Electric was the first company to adopt management by objectives (MBO) andput it into practice with Druckerrsquos help as a consultant Drucker has an insatiable appetite for statisticsHe examines them for a pattern often finds pattern that others miss Here are his predictions for eventsunfolding until about 201010487661048766A rise in alliance partnership and joint ventures on a global scale Technology will help linkthese parts of an emerging ldquoNetwork Societyrdquo10487661048766A compelling need for decentralized organizations in an increasing uncertain environment10487661048766A related increased in the use of teams in organizationsOverview of Organization Behaviour in the New Millennium 15

10487661048766An increase in the number of knowledge workers (for example computer technologists andmedical workers) and continual decline in the number of blue-collar and agricultural workersin all developed free-marked countries The knowledge workers will need continuous learninga characteristic with implications for educational systems10487661048766The twenty-first century will see the evolution of knowledge societies in developed countriesThese societies will have three sectors Business government and nonprofit The last is newand helps peoplersquos social development Nonprofit volunteer activities will characterize Englishspeakingcountries but appear fewer elsewhere and10487661048766An unquestionable forming of a world economy in which world markets will become moreimportant than domestic markets

inequity they can be presented to make one of six choices(e) Expectancy Theory Currently one of the most widely accepted explanations of motivation isVictor Vroomrsquos expectancy theory The theory therefore focuses on three relationships The strengthof a tendency to act in a certain way depends on the strength of an expectation that the act will befollowed by a given outcome and on the attractiveness of that outcome to the individual_ Effort-performance relationship The probability perceived by the individual that exerting agiven amount of effort would lead to performance_ Performance-reward relationship The degree to which the individual believes that performingat a particular level will lead to the attainment of a desired outcome_ Rewards-personal goals relationship The degree to which organisational rewards satisfy anindividualrsquos personal goals or needs and the attractiveness of those potential rewards for theindividual(f) The Porter-Lawler Model The Porter and Lawler expectancy model provides interestinginsights into the relationships between satisfaction and performance As illustrated here this modelpredicts that satisfaction is determined by the perceived equity of intrinsic and extrinsic rewards forperformance That is rather than satisfaction causing performance which many people might predictthis model argues that it is actually performance that eventually leads to satisfaction_ Determine the primary outcomes each employee wants_ Decide what levels and kinds of performance are needed to meet organizational goals_ Make sure the desired levels of performance are possible_ Link desired outcomes and desired performance_ Analyze the situation for conflicting expectancies_ Make sure the rewards are large enough_ Make sure the overall system is equitable for everyone(g) Equity Theory Equity theory recognizes that individuals are concerned not only with theabsolute amount of rewards they receive for their efforts but also with the relationship of this amountto what others receive The make judgements as to the relationship between their inputs and outcomesand the inputs and outcomes of others Based on onersquos inputs such as effort experience educationand competence one compares outcomes such as salary levels raises recognition and other factorsWhen people perceive an imbalance in their outcome-input ratio relative to others tension is createdThis tension provides the basis for motivation as people strive for what they perceive as equity andfairness Specifically the theory establishes four propositions relating to inequitable pay 1 Given payment by time over rewarded employees will produce more than will equitably paidemployees2 Given payment by quantity of production over rewarded employees will produce fewer buthigher quality units than will equitably paid employeesMotivation 993 Given payment by time under rewarded employees will produce less or poorer quality ofoutput4 Given payment by quantity of production under rewarded employees will produce a largenumber of low-quality units in comparison with equitably paid employeesIn conclusion equity theory demonstrates that for most employees motivation is influencedsignificantly by relative rewards as well as by absolute rewards but some key issues are still unclearFor instance how do employees handle conflicting equity signals such as when unions point to otheremployee groups who are substantially better off while management argues how much things haveimproved Yet regardless of these problems equity theory continues to offer us some importantinsights into employee motivation

MANAGING MOTIVATION AND CHANGEThe scope radical nature and fast rate of planned organizational change as as stated earlier beenunprecedented in recent times Mergers acquisitions strategic alliances reengineering and downsizingactivities have significantly taken off The extent to which these levels of organizational change willcontinue is uncertain however it has been predicated that organizational change will become a constantthat

is change will no longer be a single event Because information technologies are also changing thevery nature of work and expertise requirements employee motivation takes on an even greater importanceSeveral practices to enhance motivation in the contemporary workplace have been suggested _ Ensure that employeesrsquo motives and values are appropriate and ldquofitrdquo the jobs on which theyare placed_ Ensure that jobs roles and responsibilities are attractive and consistent with employeesrsquovalues beliefs and motives_ Assist employees and ensure that work goals are clear challenging attractive and attainable_ Provide employees with required personal and material resources that enhance theireffectiveness_ Create and sustain supportive social and working environments_ Recognize and reinforce performance and_ Ensure that the elements are harmonized and fit into a consistent sociotechnical organizationalsystemManaging motivation in rapidly and continuously changing organizational settings will requireflexibility focus experimentation the skill of balancing paradoxes openly communicating and testingassumptions and being open to and skilled in implementing planned change Motivation is to a largeextent culturally conditioned and learned Individual organization members working with those fromdifferent cultures should not assume when the topic is motivations whether it be needs expectanciesor satisfiers These individuals should find out what the basic cultural orientation is - whether it iscollectivist individuals productivity or quality of life oriented uncertainty avoidance or comfort withambiguity Not everyone from a culture shares all of its basic societal values but these values can and doinfluence unspoken beliefs attitudes and motivations A personrsquos own values or motivational assumptionand standards should not be accepted as absoluteThe characteristics of a changing ever-more diverse workforce suggests that managing motivationwill be challenging and difficult The challenge for owners managers and organization members will beto find ways to integrate not assimilate the diverse individuals and to address their motivational needsIntegrating and motivating a diverse workforce involves understanding and addressing value differencesValuing and motivating diverse workforces must be organizational priorities The scope radical natureand fast rate of planned organizational change in recent times have been unprecedented Several practiceshave been suggested to enhance motivation in the contemporary workplace These include ensuring thatemployeersquo motives and values are appropriate and fit the jobs in which they are placed that jobs rolesand responsibilities are attractive and consistent with employeesrsquo values beliefs and motives and thatwork goals are clear challenging attractive and attainable Other ways to enhance motivation includeproviding employees with required personal and material resources that enhance their effectivenesscreating and sustaining supportive social and working environments recognizing and reinforcingperformance and ensuring that these elements are harmonized and fit into a consistent socio-technicalorganizational system Managing motivation in rapidly and continuously changing organizational settingswill require flexibility focus experimentation the skill of balancing paradoxes openly communicatingand testing assumptions and being open to and skilled in implementing planned change MONEY AS A MOTIVATORThe widespread misconception about finance being a motivating factor or motivator in industry has ledto the failure of the best-laid incentive plans The Wire Meld company USA after a six week drive thecompany concluded that awarding war bonds to employees for perfect attendance was not the solutionto absenteeism Habits of the employees were not influenced by the plan Most of those who had beenirregular in attendance before the award system was inaugurated were irregular There was a bus slowdown in New York in it easy 1980rsquos due to the refusal of drivers (bus) to work overtime They were notinterested in more money They felt they were tired after duty to engage in extra work An analysis ofthese drivers indicated an average income of 3200 a year an income that even then could not beconsidered very highEver since Taylorrsquos time ldquoexpertsrdquo have concocted one wage incentive system after anotherresulting in a myriad of these Lytle (1938) gave one of the most comprehensive reviews of wageincentive plans He believed such plans were important in any cost production problem He cited two

advantages of wage incentive plans as being (1) an increase in production per unit (2) an increase inemployeesrsquo earnings He believed that the advantages of a well-installed and ably managed wage paymentplan accrue annually to employees and employers It is then difficult to demarcate (among) the variousincentive systems from the industrial psychologists point of view Lytlersquos attempt to classify all financialincentive plans on the basis of production earning characteristics is shown below Itrsquos an idea of thenumerous systems that have been promoted This is a historical method and is least used todayClass I Employee takes all gain or lossTime Hour week or any straight statuary rate not an extra incentiveStandard time using two rates one either side of the task a two zone multipletime planMultiple time With Arithmetic in rate between production zones (standard time plan)Multiple time Geometric steps in rate between production zonesClass II Employee takes all gainPiece or straight commission rate this sub divides into punitive basic andhigh etcClass III Gain shared between employer and employee but day wage guaranteedexception one-third premiumClass IV Empirical location of points between two variables piecework or commissionabove 100 productionMotivation 101Theories Concerning Money as an InentiveOpsahl and Dunnettee (1966) list 5 theories in this respect These attempt to explain the effect ormoney or job performancea Money as a generalised conditioned Reinforcer Money due to its association with morebasic reinforcers (need satisfiers) acquires the status of a secondary reinforcer Wolf studies (1936) andCowles (1937) demonstrated that poker chips acquired requirements value when they could be exchangedfor food ie subjects in their experiments worked as hard to get clops which could lsquobuyrsquo food as theyhad previously worked for food itselfb Money as a conditioning incentive Money acquires an incentive value due to continuedpairing with other incentives of a more basic nature Despite laboratory data this method is difficult topractice It is difficult to point out the more basic incentives with which money can be pairedc Money as an anxiety reducer The absence of money is generally associated with anxietyreactions in our society Therefore lack of money becomes a conditioned stimulus for an anxiety responseMoney therefore serves as a reducer of anxietyd Money as a ldquoHygiene Factorrdquo Herzberg Mausner and Synderman in their notion of satisfierand dissatisfies are viewed as being two distinct classes of motivators ldquoMoney is a hygiene factorwhich serves primarily as a dissatisfier ie causes dissatisfaction when absent but contributes a little tosatisfaction when present It is uncertain whether their data supports this hypothesis (Opsahl and Dunnette1966)e Money as a means of Instrumentality According to Vroomrsquos Theory of Motivation Modelmoney acquires valence due to its perceived instrumentality for obtaining the desired outcomes eg Ifmoney were perceived as being instrumental to the positive goal of security then money would acquirea positive valance Then the likelihood of a person acting in a way to acquire money would be a functionof his need for security multiplied by the expectancy that a particular money-seeking act would result ina specified monetary return A simple numerical explanation would beLm = f (s) times EwhereLm = Likelihood of a person acting in a way to acquire moneyS = Need for securityE = Expectancy that a particular money seeking act would result in a specifiedmonetary returnIn their review on the role of financial compensation in industrial motivation (Opsahl and Dunnette1966) state The role of money as reward in modern industry continues to be poorly understood despite

our economies being based on a monetary reward system Although the use of formal incentive paysystems has diminished in recent years in favour of other non-financial incentives money units willprobably always be exchanged for work Thus a better knowledge of the dynamics of this exchangeprocess is certainly neededKinds of IncentivesIncentives may be classified financial and non-financial More aptly co-operative and competitive(i) Co-operation Incentives This involves organising people into groups (meaningful groups)and having them work together for a common goal This is the latest of kinds of incentivesand is practiced in industry as well as educational institutions This results in more learning atthe educational level and greater production at the industrial level People contribute equal andmaximum efforts towards the realisation of common goal102 (ii) Competitive Incentives These involve the urge of doing better than the next individual(iii) Individual IncentivesThese are extremely meaningful if the individual himself introducesthem In industry the incentive is used as a means of spurring an employee towards someoneelsersquos goal He may not be interested in either reduced costs or increased production But hemay be persuaded to achieve his goal by an incentive when the incentive results in equalsatisfaction for the employer too when the plant is being successfully operated The majordifficulty with financial incentives has been the facts that fear of a rate cut-whether the fear isjustified or not They also fear a lay off Hence indifference or evasiveness to wage raisesBoth competition and co-operation are not mutually inclusive especially when individuals cooperatein-groups to compete with other groups Industry in the past has placed too much emphasis oncompetition only recently have the advantages of co-operative behaviour as an incentive been recognisedThe use of co-operation as an incentive holds considerable promise of successResearch on IncentivesA host of experts have attempted in divulge into the issue of incentives and it is conspicuous thateach one of them has endeavored to surpass their predecessor or rather improve on the previousstudies(a) Blum and Ruess Study In this study 5 drives were listed in an attempt to determine therelative importance of these five incentives on an employee in a job The data were obtained from 286gainfully employed people from 17-60 years of age and in occupation from unskilled manual labour tothe professionals there were 181 men 72 of whom were married and 105 women 26 of whom weremarried all subjects lived in New York city area A questionnaire was prepared aimed at comparing theemployeesrsquo incentive with the other four in all 10 comparisons Each time one incentive is compared tothe other in the comparison a score is assigned to it ie a maximum of ten points is distributed amongthe five incentives Then the scores were tabulated thus against the five incentives the purpose of thequestionnaire was not disclosed to the subject till after completing itFindingsIn this study they have measured the attitudes of employees toward time incentives at the paidtechnique it was found that_ Advancement and security were the most important_ Incentives hours of work were the least important_ Salary was rated third by men 4th women_ Supervisor relationships were ranked fourth by men and third by women_ Married men considered security more important and advancement less important than didsingle men_ Married women were more interested in working fewer hours than were the single women_ The significance of advancement as an incentive decreased with age for both sexes andsecurity became more important with age_ Advancement and security were considered more important than salary and_ The attitudes of the employees changed depending on such major classifications as sex maritalstatus and ageMotivation 103

(b) Jurgensen Study His study involved 150 females and 1189 male applicants for positions atthe Minnea Polis Gas Light Company Each subject was asked to rank ten items in order of preferenceFindingsJob Preferences were affected by the extent of Education than by most other variablesAdvancement became more important and security less important as education increasedAccording to his findings wages hours and working conditions are not so important as generallythought and the type of work is more important than is ordinarily stated(c) Stagner Study The study included 7000 employees of a Nationwide Corporation After viewingvarious researchers he concludes that neither executives nor workers are concerned about pay as suchexcept when economically pinched At other times they prefer ego-satisfactions such as prestigerecognition and individual treatment He rated the importance by 7000 workers on various job factors(d) Jones and Jeffrey Study This is a study which evaluated preferences among electricalworkers for alternate form of job compensation They considered each of four different compensationdimensions listed belowHourly wage versus weekly wageMerit incentive versus non-merit incentivePiecework incentive versus no piecework incentive andRegular pay rate versus high pay rateFindingsNon-union workers significantly preferred the weekly wage the merit incentive the pieceworkincentive and the higher wage Union Members were willing to take jobs with non-merit incentive andregular pay in preference to jobs having merit incentives with higher pay They would forfeit money tostay clear of a merit system This would certainly seem to argue that the union as an organisationprovides the workers with some form of ldquogroup protectionrdquo or security that is worth a sacrifice inactual money units He no longer has to bargain for himself but is part of a larger body which bargainsin much broader terms(e) Nealey Study He examined work preference for different employee benefit programmes Hehad 1133 members of an electrical trade union panel compare the following six-benefit option1 The company will pay the cost of an additional 50 a month pension to be added to retirementbenefit2 I will get a percent raise3 The normal workweek shall be cut to 375 hrs Without any reduction in weekly earnings4 The company will pay the entire costs of full medical insurance for my family and myself5 It will be agreed that all regular employees must be members of the union and6 I will have three weeks paid vacation in a year in addition to my present vacation to the extravacation to be taken when I chooseThe six plans were chosen so as to be of approximately equal cost to the employerIn general the workers preferred medical insurance option and the union were unimpressed withthe enticement of 375 hours week104 Major FindingsThere is a tremendous increase in preference for the pension plan as one moves into older age groupsThe union is judged the most desirable (relative to other plans) among the middle-aged workersThe 3-week additional vacation was most preferred on a move through the older groups(f) DudychandashNaylor Study (1966) The study was designed to examine what job characteristicswere of primary importance to todayrsquos college studentsFindingsStudents in their sample gave the following order of job traits1 Pay2 Opportunity for growth and advancement3 Security4 Fellow employees5 Working conditions and

6 Supervisor-employee relationsThese were students who for most part had never held regular job and who were indicating whatthings they felt would be important when they did start choosing between job opportunities Theyplaced high weight to pay(g) Maslowrsquos View on Financial Incentives Maslowrsquos theory of motivation dismisses financeas a motivator He argued that money satisfies only lower needs (safety and psychological needs) let thehigher order needIn one survey he found that when managers were asked what factors they felt determined theirpay they responded training and experience were the most important factors

Theory X and Theory Y Douglas McGregor (1960)Douglas McGregor and MIT psychologist proposed two sets of assumptions about humanmotivation that a manager can hold McGregor called the assumptions Theory X and Theory Y Amanagerrsquos behaviour toward his workers and his management style will differ based on the assumptionsguiding his behaviour10487661048766The average person dislikes working and will avoid it if possible10487661048766Because people dislike working they must be directed tightly controlled and pressured to getthem to work toward organizational goals10487661048766The average person wants security avoids responsibility and has little ambition and10487661048766McGregor believed that many managers held Theory X assumption about workers Suchmanagers give their workers little latitude closely supervise them and punish poor performanceThey use few rewards and typically give only negative feedbackThe Theory Y assumptions are as follows10487661048766The average person does not dislike work it is as natural as play10487661048766If a person is committed to a set he will work towards them without an external control10487661048766Goal commitment follows from the satisfaction of a personrsquos desire to achieve10487661048766The average person can learn to accept responsibility Lack of ambition is not a basic humancharacteristic10487661048766Creativity ingenuity and imagination are human characteristics that are widely dispersed inthe population and10487661048766Modern organizations only partially use and tap the potentialities of its workersManagers who hold Theory Y assumptions have a positive view of people believe they have muchhidden potential and that people will work toward organizational goals These managers will give workersmore job responsibility and reply on self-motivation more than coercion These two sets of differentassumptions reigned in the academic literature for many years They were widely understood by practicingmanagers Although called a theory they are not theories as described earlier They are assumptions orbeliefs about human motivation that can strongly affect management behaviourThe Twentieth Centuryrsquos Management Guru Peter F Drucker (1995)Austrian born Peter F Drucker ranks among the most widely read and widely quoted managementscholars of the twentieth century Drucker is a professor of management a Claremont College in Californiaa post he has held since 1971 He has written almost 30 books and continued his writing activity into thelate 1990s His 1954 book The Practice of Management launched him as a significant managementwriter Among his most lasting observations was his proposed philosophy of management by objectivesand self-control General Electric was the first company to adopt management by objectives (MBO) andput it into practice with Druckerrsquos help as a consultant Drucker has an insatiable appetite for statisticsHe examines them for a pattern often finds pattern that others miss Here are his predictions for eventsunfolding until about 201010487661048766A rise in alliance partnership and joint ventures on a global scale Technology will help linkthese parts of an emerging ldquoNetwork Societyrdquo10487661048766A compelling need for decentralized organizations in an increasing uncertain environment10487661048766A related increased in the use of teams in organizationsOverview of Organization Behaviour in the New Millennium 15

10487661048766An increase in the number of knowledge workers (for example computer technologists andmedical workers) and continual decline in the number of blue-collar and agricultural workersin all developed free-marked countries The knowledge workers will need continuous learninga characteristic with implications for educational systems10487661048766The twenty-first century will see the evolution of knowledge societies in developed countriesThese societies will have three sectors Business government and nonprofit The last is newand helps peoplersquos social development Nonprofit volunteer activities will characterize Englishspeakingcountries but appear fewer elsewhere and10487661048766An unquestionable forming of a world economy in which world markets will become moreimportant than domestic markets

is change will no longer be a single event Because information technologies are also changing thevery nature of work and expertise requirements employee motivation takes on an even greater importanceSeveral practices to enhance motivation in the contemporary workplace have been suggested _ Ensure that employeesrsquo motives and values are appropriate and ldquofitrdquo the jobs on which theyare placed_ Ensure that jobs roles and responsibilities are attractive and consistent with employeesrsquovalues beliefs and motives_ Assist employees and ensure that work goals are clear challenging attractive and attainable_ Provide employees with required personal and material resources that enhance theireffectiveness_ Create and sustain supportive social and working environments_ Recognize and reinforce performance and_ Ensure that the elements are harmonized and fit into a consistent sociotechnical organizationalsystemManaging motivation in rapidly and continuously changing organizational settings will requireflexibility focus experimentation the skill of balancing paradoxes openly communicating and testingassumptions and being open to and skilled in implementing planned change Motivation is to a largeextent culturally conditioned and learned Individual organization members working with those fromdifferent cultures should not assume when the topic is motivations whether it be needs expectanciesor satisfiers These individuals should find out what the basic cultural orientation is - whether it iscollectivist individuals productivity or quality of life oriented uncertainty avoidance or comfort withambiguity Not everyone from a culture shares all of its basic societal values but these values can and doinfluence unspoken beliefs attitudes and motivations A personrsquos own values or motivational assumptionand standards should not be accepted as absoluteThe characteristics of a changing ever-more diverse workforce suggests that managing motivationwill be challenging and difficult The challenge for owners managers and organization members will beto find ways to integrate not assimilate the diverse individuals and to address their motivational needsIntegrating and motivating a diverse workforce involves understanding and addressing value differencesValuing and motivating diverse workforces must be organizational priorities The scope radical natureand fast rate of planned organizational change in recent times have been unprecedented Several practiceshave been suggested to enhance motivation in the contemporary workplace These include ensuring thatemployeersquo motives and values are appropriate and fit the jobs in which they are placed that jobs rolesand responsibilities are attractive and consistent with employeesrsquo values beliefs and motives and thatwork goals are clear challenging attractive and attainable Other ways to enhance motivation includeproviding employees with required personal and material resources that enhance their effectivenesscreating and sustaining supportive social and working environments recognizing and reinforcingperformance and ensuring that these elements are harmonized and fit into a consistent socio-technicalorganizational system Managing motivation in rapidly and continuously changing organizational settingswill require flexibility focus experimentation the skill of balancing paradoxes openly communicatingand testing assumptions and being open to and skilled in implementing planned change MONEY AS A MOTIVATORThe widespread misconception about finance being a motivating factor or motivator in industry has ledto the failure of the best-laid incentive plans The Wire Meld company USA after a six week drive thecompany concluded that awarding war bonds to employees for perfect attendance was not the solutionto absenteeism Habits of the employees were not influenced by the plan Most of those who had beenirregular in attendance before the award system was inaugurated were irregular There was a bus slowdown in New York in it easy 1980rsquos due to the refusal of drivers (bus) to work overtime They were notinterested in more money They felt they were tired after duty to engage in extra work An analysis ofthese drivers indicated an average income of 3200 a year an income that even then could not beconsidered very highEver since Taylorrsquos time ldquoexpertsrdquo have concocted one wage incentive system after anotherresulting in a myriad of these Lytle (1938) gave one of the most comprehensive reviews of wageincentive plans He believed such plans were important in any cost production problem He cited two

advantages of wage incentive plans as being (1) an increase in production per unit (2) an increase inemployeesrsquo earnings He believed that the advantages of a well-installed and ably managed wage paymentplan accrue annually to employees and employers It is then difficult to demarcate (among) the variousincentive systems from the industrial psychologists point of view Lytlersquos attempt to classify all financialincentive plans on the basis of production earning characteristics is shown below Itrsquos an idea of thenumerous systems that have been promoted This is a historical method and is least used todayClass I Employee takes all gain or lossTime Hour week or any straight statuary rate not an extra incentiveStandard time using two rates one either side of the task a two zone multipletime planMultiple time With Arithmetic in rate between production zones (standard time plan)Multiple time Geometric steps in rate between production zonesClass II Employee takes all gainPiece or straight commission rate this sub divides into punitive basic andhigh etcClass III Gain shared between employer and employee but day wage guaranteedexception one-third premiumClass IV Empirical location of points between two variables piecework or commissionabove 100 productionMotivation 101Theories Concerning Money as an InentiveOpsahl and Dunnettee (1966) list 5 theories in this respect These attempt to explain the effect ormoney or job performancea Money as a generalised conditioned Reinforcer Money due to its association with morebasic reinforcers (need satisfiers) acquires the status of a secondary reinforcer Wolf studies (1936) andCowles (1937) demonstrated that poker chips acquired requirements value when they could be exchangedfor food ie subjects in their experiments worked as hard to get clops which could lsquobuyrsquo food as theyhad previously worked for food itselfb Money as a conditioning incentive Money acquires an incentive value due to continuedpairing with other incentives of a more basic nature Despite laboratory data this method is difficult topractice It is difficult to point out the more basic incentives with which money can be pairedc Money as an anxiety reducer The absence of money is generally associated with anxietyreactions in our society Therefore lack of money becomes a conditioned stimulus for an anxiety responseMoney therefore serves as a reducer of anxietyd Money as a ldquoHygiene Factorrdquo Herzberg Mausner and Synderman in their notion of satisfierand dissatisfies are viewed as being two distinct classes of motivators ldquoMoney is a hygiene factorwhich serves primarily as a dissatisfier ie causes dissatisfaction when absent but contributes a little tosatisfaction when present It is uncertain whether their data supports this hypothesis (Opsahl and Dunnette1966)e Money as a means of Instrumentality According to Vroomrsquos Theory of Motivation Modelmoney acquires valence due to its perceived instrumentality for obtaining the desired outcomes eg Ifmoney were perceived as being instrumental to the positive goal of security then money would acquirea positive valance Then the likelihood of a person acting in a way to acquire money would be a functionof his need for security multiplied by the expectancy that a particular money-seeking act would result ina specified monetary return A simple numerical explanation would beLm = f (s) times EwhereLm = Likelihood of a person acting in a way to acquire moneyS = Need for securityE = Expectancy that a particular money seeking act would result in a specifiedmonetary returnIn their review on the role of financial compensation in industrial motivation (Opsahl and Dunnette1966) state The role of money as reward in modern industry continues to be poorly understood despite

our economies being based on a monetary reward system Although the use of formal incentive paysystems has diminished in recent years in favour of other non-financial incentives money units willprobably always be exchanged for work Thus a better knowledge of the dynamics of this exchangeprocess is certainly neededKinds of IncentivesIncentives may be classified financial and non-financial More aptly co-operative and competitive(i) Co-operation Incentives This involves organising people into groups (meaningful groups)and having them work together for a common goal This is the latest of kinds of incentivesand is practiced in industry as well as educational institutions This results in more learning atthe educational level and greater production at the industrial level People contribute equal andmaximum efforts towards the realisation of common goal102 (ii) Competitive Incentives These involve the urge of doing better than the next individual(iii) Individual IncentivesThese are extremely meaningful if the individual himself introducesthem In industry the incentive is used as a means of spurring an employee towards someoneelsersquos goal He may not be interested in either reduced costs or increased production But hemay be persuaded to achieve his goal by an incentive when the incentive results in equalsatisfaction for the employer too when the plant is being successfully operated The majordifficulty with financial incentives has been the facts that fear of a rate cut-whether the fear isjustified or not They also fear a lay off Hence indifference or evasiveness to wage raisesBoth competition and co-operation are not mutually inclusive especially when individuals cooperatein-groups to compete with other groups Industry in the past has placed too much emphasis oncompetition only recently have the advantages of co-operative behaviour as an incentive been recognisedThe use of co-operation as an incentive holds considerable promise of successResearch on IncentivesA host of experts have attempted in divulge into the issue of incentives and it is conspicuous thateach one of them has endeavored to surpass their predecessor or rather improve on the previousstudies(a) Blum and Ruess Study In this study 5 drives were listed in an attempt to determine therelative importance of these five incentives on an employee in a job The data were obtained from 286gainfully employed people from 17-60 years of age and in occupation from unskilled manual labour tothe professionals there were 181 men 72 of whom were married and 105 women 26 of whom weremarried all subjects lived in New York city area A questionnaire was prepared aimed at comparing theemployeesrsquo incentive with the other four in all 10 comparisons Each time one incentive is compared tothe other in the comparison a score is assigned to it ie a maximum of ten points is distributed amongthe five incentives Then the scores were tabulated thus against the five incentives the purpose of thequestionnaire was not disclosed to the subject till after completing itFindingsIn this study they have measured the attitudes of employees toward time incentives at the paidtechnique it was found that_ Advancement and security were the most important_ Incentives hours of work were the least important_ Salary was rated third by men 4th women_ Supervisor relationships were ranked fourth by men and third by women_ Married men considered security more important and advancement less important than didsingle men_ Married women were more interested in working fewer hours than were the single women_ The significance of advancement as an incentive decreased with age for both sexes andsecurity became more important with age_ Advancement and security were considered more important than salary and_ The attitudes of the employees changed depending on such major classifications as sex maritalstatus and ageMotivation 103

(b) Jurgensen Study His study involved 150 females and 1189 male applicants for positions atthe Minnea Polis Gas Light Company Each subject was asked to rank ten items in order of preferenceFindingsJob Preferences were affected by the extent of Education than by most other variablesAdvancement became more important and security less important as education increasedAccording to his findings wages hours and working conditions are not so important as generallythought and the type of work is more important than is ordinarily stated(c) Stagner Study The study included 7000 employees of a Nationwide Corporation After viewingvarious researchers he concludes that neither executives nor workers are concerned about pay as suchexcept when economically pinched At other times they prefer ego-satisfactions such as prestigerecognition and individual treatment He rated the importance by 7000 workers on various job factors(d) Jones and Jeffrey Study This is a study which evaluated preferences among electricalworkers for alternate form of job compensation They considered each of four different compensationdimensions listed belowHourly wage versus weekly wageMerit incentive versus non-merit incentivePiecework incentive versus no piecework incentive andRegular pay rate versus high pay rateFindingsNon-union workers significantly preferred the weekly wage the merit incentive the pieceworkincentive and the higher wage Union Members were willing to take jobs with non-merit incentive andregular pay in preference to jobs having merit incentives with higher pay They would forfeit money tostay clear of a merit system This would certainly seem to argue that the union as an organisationprovides the workers with some form of ldquogroup protectionrdquo or security that is worth a sacrifice inactual money units He no longer has to bargain for himself but is part of a larger body which bargainsin much broader terms(e) Nealey Study He examined work preference for different employee benefit programmes Hehad 1133 members of an electrical trade union panel compare the following six-benefit option1 The company will pay the cost of an additional 50 a month pension to be added to retirementbenefit2 I will get a percent raise3 The normal workweek shall be cut to 375 hrs Without any reduction in weekly earnings4 The company will pay the entire costs of full medical insurance for my family and myself5 It will be agreed that all regular employees must be members of the union and6 I will have three weeks paid vacation in a year in addition to my present vacation to the extravacation to be taken when I chooseThe six plans were chosen so as to be of approximately equal cost to the employerIn general the workers preferred medical insurance option and the union were unimpressed withthe enticement of 375 hours week104 Major FindingsThere is a tremendous increase in preference for the pension plan as one moves into older age groupsThe union is judged the most desirable (relative to other plans) among the middle-aged workersThe 3-week additional vacation was most preferred on a move through the older groups(f) DudychandashNaylor Study (1966) The study was designed to examine what job characteristicswere of primary importance to todayrsquos college studentsFindingsStudents in their sample gave the following order of job traits1 Pay2 Opportunity for growth and advancement3 Security4 Fellow employees5 Working conditions and

6 Supervisor-employee relationsThese were students who for most part had never held regular job and who were indicating whatthings they felt would be important when they did start choosing between job opportunities Theyplaced high weight to pay(g) Maslowrsquos View on Financial Incentives Maslowrsquos theory of motivation dismisses financeas a motivator He argued that money satisfies only lower needs (safety and psychological needs) let thehigher order needIn one survey he found that when managers were asked what factors they felt determined theirpay they responded training and experience were the most important factors

Theory X and Theory Y Douglas McGregor (1960)Douglas McGregor and MIT psychologist proposed two sets of assumptions about humanmotivation that a manager can hold McGregor called the assumptions Theory X and Theory Y Amanagerrsquos behaviour toward his workers and his management style will differ based on the assumptionsguiding his behaviour10487661048766The average person dislikes working and will avoid it if possible10487661048766Because people dislike working they must be directed tightly controlled and pressured to getthem to work toward organizational goals10487661048766The average person wants security avoids responsibility and has little ambition and10487661048766McGregor believed that many managers held Theory X assumption about workers Suchmanagers give their workers little latitude closely supervise them and punish poor performanceThey use few rewards and typically give only negative feedbackThe Theory Y assumptions are as follows10487661048766The average person does not dislike work it is as natural as play10487661048766If a person is committed to a set he will work towards them without an external control10487661048766Goal commitment follows from the satisfaction of a personrsquos desire to achieve10487661048766The average person can learn to accept responsibility Lack of ambition is not a basic humancharacteristic10487661048766Creativity ingenuity and imagination are human characteristics that are widely dispersed inthe population and10487661048766Modern organizations only partially use and tap the potentialities of its workersManagers who hold Theory Y assumptions have a positive view of people believe they have muchhidden potential and that people will work toward organizational goals These managers will give workersmore job responsibility and reply on self-motivation more than coercion These two sets of differentassumptions reigned in the academic literature for many years They were widely understood by practicingmanagers Although called a theory they are not theories as described earlier They are assumptions orbeliefs about human motivation that can strongly affect management behaviourThe Twentieth Centuryrsquos Management Guru Peter F Drucker (1995)Austrian born Peter F Drucker ranks among the most widely read and widely quoted managementscholars of the twentieth century Drucker is a professor of management a Claremont College in Californiaa post he has held since 1971 He has written almost 30 books and continued his writing activity into thelate 1990s His 1954 book The Practice of Management launched him as a significant managementwriter Among his most lasting observations was his proposed philosophy of management by objectivesand self-control General Electric was the first company to adopt management by objectives (MBO) andput it into practice with Druckerrsquos help as a consultant Drucker has an insatiable appetite for statisticsHe examines them for a pattern often finds pattern that others miss Here are his predictions for eventsunfolding until about 201010487661048766A rise in alliance partnership and joint ventures on a global scale Technology will help linkthese parts of an emerging ldquoNetwork Societyrdquo10487661048766A compelling need for decentralized organizations in an increasing uncertain environment10487661048766A related increased in the use of teams in organizationsOverview of Organization Behaviour in the New Millennium 15

10487661048766An increase in the number of knowledge workers (for example computer technologists andmedical workers) and continual decline in the number of blue-collar and agricultural workersin all developed free-marked countries The knowledge workers will need continuous learninga characteristic with implications for educational systems10487661048766The twenty-first century will see the evolution of knowledge societies in developed countriesThese societies will have three sectors Business government and nonprofit The last is newand helps peoplersquos social development Nonprofit volunteer activities will characterize Englishspeakingcountries but appear fewer elsewhere and10487661048766An unquestionable forming of a world economy in which world markets will become moreimportant than domestic markets

advantages of wage incentive plans as being (1) an increase in production per unit (2) an increase inemployeesrsquo earnings He believed that the advantages of a well-installed and ably managed wage paymentplan accrue annually to employees and employers It is then difficult to demarcate (among) the variousincentive systems from the industrial psychologists point of view Lytlersquos attempt to classify all financialincentive plans on the basis of production earning characteristics is shown below Itrsquos an idea of thenumerous systems that have been promoted This is a historical method and is least used todayClass I Employee takes all gain or lossTime Hour week or any straight statuary rate not an extra incentiveStandard time using two rates one either side of the task a two zone multipletime planMultiple time With Arithmetic in rate between production zones (standard time plan)Multiple time Geometric steps in rate between production zonesClass II Employee takes all gainPiece or straight commission rate this sub divides into punitive basic andhigh etcClass III Gain shared between employer and employee but day wage guaranteedexception one-third premiumClass IV Empirical location of points between two variables piecework or commissionabove 100 productionMotivation 101Theories Concerning Money as an InentiveOpsahl and Dunnettee (1966) list 5 theories in this respect These attempt to explain the effect ormoney or job performancea Money as a generalised conditioned Reinforcer Money due to its association with morebasic reinforcers (need satisfiers) acquires the status of a secondary reinforcer Wolf studies (1936) andCowles (1937) demonstrated that poker chips acquired requirements value when they could be exchangedfor food ie subjects in their experiments worked as hard to get clops which could lsquobuyrsquo food as theyhad previously worked for food itselfb Money as a conditioning incentive Money acquires an incentive value due to continuedpairing with other incentives of a more basic nature Despite laboratory data this method is difficult topractice It is difficult to point out the more basic incentives with which money can be pairedc Money as an anxiety reducer The absence of money is generally associated with anxietyreactions in our society Therefore lack of money becomes a conditioned stimulus for an anxiety responseMoney therefore serves as a reducer of anxietyd Money as a ldquoHygiene Factorrdquo Herzberg Mausner and Synderman in their notion of satisfierand dissatisfies are viewed as being two distinct classes of motivators ldquoMoney is a hygiene factorwhich serves primarily as a dissatisfier ie causes dissatisfaction when absent but contributes a little tosatisfaction when present It is uncertain whether their data supports this hypothesis (Opsahl and Dunnette1966)e Money as a means of Instrumentality According to Vroomrsquos Theory of Motivation Modelmoney acquires valence due to its perceived instrumentality for obtaining the desired outcomes eg Ifmoney were perceived as being instrumental to the positive goal of security then money would acquirea positive valance Then the likelihood of a person acting in a way to acquire money would be a functionof his need for security multiplied by the expectancy that a particular money-seeking act would result ina specified monetary return A simple numerical explanation would beLm = f (s) times EwhereLm = Likelihood of a person acting in a way to acquire moneyS = Need for securityE = Expectancy that a particular money seeking act would result in a specifiedmonetary returnIn their review on the role of financial compensation in industrial motivation (Opsahl and Dunnette1966) state The role of money as reward in modern industry continues to be poorly understood despite

our economies being based on a monetary reward system Although the use of formal incentive paysystems has diminished in recent years in favour of other non-financial incentives money units willprobably always be exchanged for work Thus a better knowledge of the dynamics of this exchangeprocess is certainly neededKinds of IncentivesIncentives may be classified financial and non-financial More aptly co-operative and competitive(i) Co-operation Incentives This involves organising people into groups (meaningful groups)and having them work together for a common goal This is the latest of kinds of incentivesand is practiced in industry as well as educational institutions This results in more learning atthe educational level and greater production at the industrial level People contribute equal andmaximum efforts towards the realisation of common goal102 (ii) Competitive Incentives These involve the urge of doing better than the next individual(iii) Individual IncentivesThese are extremely meaningful if the individual himself introducesthem In industry the incentive is used as a means of spurring an employee towards someoneelsersquos goal He may not be interested in either reduced costs or increased production But hemay be persuaded to achieve his goal by an incentive when the incentive results in equalsatisfaction for the employer too when the plant is being successfully operated The majordifficulty with financial incentives has been the facts that fear of a rate cut-whether the fear isjustified or not They also fear a lay off Hence indifference or evasiveness to wage raisesBoth competition and co-operation are not mutually inclusive especially when individuals cooperatein-groups to compete with other groups Industry in the past has placed too much emphasis oncompetition only recently have the advantages of co-operative behaviour as an incentive been recognisedThe use of co-operation as an incentive holds considerable promise of successResearch on IncentivesA host of experts have attempted in divulge into the issue of incentives and it is conspicuous thateach one of them has endeavored to surpass their predecessor or rather improve on the previousstudies(a) Blum and Ruess Study In this study 5 drives were listed in an attempt to determine therelative importance of these five incentives on an employee in a job The data were obtained from 286gainfully employed people from 17-60 years of age and in occupation from unskilled manual labour tothe professionals there were 181 men 72 of whom were married and 105 women 26 of whom weremarried all subjects lived in New York city area A questionnaire was prepared aimed at comparing theemployeesrsquo incentive with the other four in all 10 comparisons Each time one incentive is compared tothe other in the comparison a score is assigned to it ie a maximum of ten points is distributed amongthe five incentives Then the scores were tabulated thus against the five incentives the purpose of thequestionnaire was not disclosed to the subject till after completing itFindingsIn this study they have measured the attitudes of employees toward time incentives at the paidtechnique it was found that_ Advancement and security were the most important_ Incentives hours of work were the least important_ Salary was rated third by men 4th women_ Supervisor relationships were ranked fourth by men and third by women_ Married men considered security more important and advancement less important than didsingle men_ Married women were more interested in working fewer hours than were the single women_ The significance of advancement as an incentive decreased with age for both sexes andsecurity became more important with age_ Advancement and security were considered more important than salary and_ The attitudes of the employees changed depending on such major classifications as sex maritalstatus and ageMotivation 103

(b) Jurgensen Study His study involved 150 females and 1189 male applicants for positions atthe Minnea Polis Gas Light Company Each subject was asked to rank ten items in order of preferenceFindingsJob Preferences were affected by the extent of Education than by most other variablesAdvancement became more important and security less important as education increasedAccording to his findings wages hours and working conditions are not so important as generallythought and the type of work is more important than is ordinarily stated(c) Stagner Study The study included 7000 employees of a Nationwide Corporation After viewingvarious researchers he concludes that neither executives nor workers are concerned about pay as suchexcept when economically pinched At other times they prefer ego-satisfactions such as prestigerecognition and individual treatment He rated the importance by 7000 workers on various job factors(d) Jones and Jeffrey Study This is a study which evaluated preferences among electricalworkers for alternate form of job compensation They considered each of four different compensationdimensions listed belowHourly wage versus weekly wageMerit incentive versus non-merit incentivePiecework incentive versus no piecework incentive andRegular pay rate versus high pay rateFindingsNon-union workers significantly preferred the weekly wage the merit incentive the pieceworkincentive and the higher wage Union Members were willing to take jobs with non-merit incentive andregular pay in preference to jobs having merit incentives with higher pay They would forfeit money tostay clear of a merit system This would certainly seem to argue that the union as an organisationprovides the workers with some form of ldquogroup protectionrdquo or security that is worth a sacrifice inactual money units He no longer has to bargain for himself but is part of a larger body which bargainsin much broader terms(e) Nealey Study He examined work preference for different employee benefit programmes Hehad 1133 members of an electrical trade union panel compare the following six-benefit option1 The company will pay the cost of an additional 50 a month pension to be added to retirementbenefit2 I will get a percent raise3 The normal workweek shall be cut to 375 hrs Without any reduction in weekly earnings4 The company will pay the entire costs of full medical insurance for my family and myself5 It will be agreed that all regular employees must be members of the union and6 I will have three weeks paid vacation in a year in addition to my present vacation to the extravacation to be taken when I chooseThe six plans were chosen so as to be of approximately equal cost to the employerIn general the workers preferred medical insurance option and the union were unimpressed withthe enticement of 375 hours week104 Major FindingsThere is a tremendous increase in preference for the pension plan as one moves into older age groupsThe union is judged the most desirable (relative to other plans) among the middle-aged workersThe 3-week additional vacation was most preferred on a move through the older groups(f) DudychandashNaylor Study (1966) The study was designed to examine what job characteristicswere of primary importance to todayrsquos college studentsFindingsStudents in their sample gave the following order of job traits1 Pay2 Opportunity for growth and advancement3 Security4 Fellow employees5 Working conditions and

6 Supervisor-employee relationsThese were students who for most part had never held regular job and who were indicating whatthings they felt would be important when they did start choosing between job opportunities Theyplaced high weight to pay(g) Maslowrsquos View on Financial Incentives Maslowrsquos theory of motivation dismisses financeas a motivator He argued that money satisfies only lower needs (safety and psychological needs) let thehigher order needIn one survey he found that when managers were asked what factors they felt determined theirpay they responded training and experience were the most important factors

Theory X and Theory Y Douglas McGregor (1960)Douglas McGregor and MIT psychologist proposed two sets of assumptions about humanmotivation that a manager can hold McGregor called the assumptions Theory X and Theory Y Amanagerrsquos behaviour toward his workers and his management style will differ based on the assumptionsguiding his behaviour10487661048766The average person dislikes working and will avoid it if possible10487661048766Because people dislike working they must be directed tightly controlled and pressured to getthem to work toward organizational goals10487661048766The average person wants security avoids responsibility and has little ambition and10487661048766McGregor believed that many managers held Theory X assumption about workers Suchmanagers give their workers little latitude closely supervise them and punish poor performanceThey use few rewards and typically give only negative feedbackThe Theory Y assumptions are as follows10487661048766The average person does not dislike work it is as natural as play10487661048766If a person is committed to a set he will work towards them without an external control10487661048766Goal commitment follows from the satisfaction of a personrsquos desire to achieve10487661048766The average person can learn to accept responsibility Lack of ambition is not a basic humancharacteristic10487661048766Creativity ingenuity and imagination are human characteristics that are widely dispersed inthe population and10487661048766Modern organizations only partially use and tap the potentialities of its workersManagers who hold Theory Y assumptions have a positive view of people believe they have muchhidden potential and that people will work toward organizational goals These managers will give workersmore job responsibility and reply on self-motivation more than coercion These two sets of differentassumptions reigned in the academic literature for many years They were widely understood by practicingmanagers Although called a theory they are not theories as described earlier They are assumptions orbeliefs about human motivation that can strongly affect management behaviourThe Twentieth Centuryrsquos Management Guru Peter F Drucker (1995)Austrian born Peter F Drucker ranks among the most widely read and widely quoted managementscholars of the twentieth century Drucker is a professor of management a Claremont College in Californiaa post he has held since 1971 He has written almost 30 books and continued his writing activity into thelate 1990s His 1954 book The Practice of Management launched him as a significant managementwriter Among his most lasting observations was his proposed philosophy of management by objectivesand self-control General Electric was the first company to adopt management by objectives (MBO) andput it into practice with Druckerrsquos help as a consultant Drucker has an insatiable appetite for statisticsHe examines them for a pattern often finds pattern that others miss Here are his predictions for eventsunfolding until about 201010487661048766A rise in alliance partnership and joint ventures on a global scale Technology will help linkthese parts of an emerging ldquoNetwork Societyrdquo10487661048766A compelling need for decentralized organizations in an increasing uncertain environment10487661048766A related increased in the use of teams in organizationsOverview of Organization Behaviour in the New Millennium 15

10487661048766An increase in the number of knowledge workers (for example computer technologists andmedical workers) and continual decline in the number of blue-collar and agricultural workersin all developed free-marked countries The knowledge workers will need continuous learninga characteristic with implications for educational systems10487661048766The twenty-first century will see the evolution of knowledge societies in developed countriesThese societies will have three sectors Business government and nonprofit The last is newand helps peoplersquos social development Nonprofit volunteer activities will characterize Englishspeakingcountries but appear fewer elsewhere and10487661048766An unquestionable forming of a world economy in which world markets will become moreimportant than domestic markets

our economies being based on a monetary reward system Although the use of formal incentive paysystems has diminished in recent years in favour of other non-financial incentives money units willprobably always be exchanged for work Thus a better knowledge of the dynamics of this exchangeprocess is certainly neededKinds of IncentivesIncentives may be classified financial and non-financial More aptly co-operative and competitive(i) Co-operation Incentives This involves organising people into groups (meaningful groups)and having them work together for a common goal This is the latest of kinds of incentivesand is practiced in industry as well as educational institutions This results in more learning atthe educational level and greater production at the industrial level People contribute equal andmaximum efforts towards the realisation of common goal102 (ii) Competitive Incentives These involve the urge of doing better than the next individual(iii) Individual IncentivesThese are extremely meaningful if the individual himself introducesthem In industry the incentive is used as a means of spurring an employee towards someoneelsersquos goal He may not be interested in either reduced costs or increased production But hemay be persuaded to achieve his goal by an incentive when the incentive results in equalsatisfaction for the employer too when the plant is being successfully operated The majordifficulty with financial incentives has been the facts that fear of a rate cut-whether the fear isjustified or not They also fear a lay off Hence indifference or evasiveness to wage raisesBoth competition and co-operation are not mutually inclusive especially when individuals cooperatein-groups to compete with other groups Industry in the past has placed too much emphasis oncompetition only recently have the advantages of co-operative behaviour as an incentive been recognisedThe use of co-operation as an incentive holds considerable promise of successResearch on IncentivesA host of experts have attempted in divulge into the issue of incentives and it is conspicuous thateach one of them has endeavored to surpass their predecessor or rather improve on the previousstudies(a) Blum and Ruess Study In this study 5 drives were listed in an attempt to determine therelative importance of these five incentives on an employee in a job The data were obtained from 286gainfully employed people from 17-60 years of age and in occupation from unskilled manual labour tothe professionals there were 181 men 72 of whom were married and 105 women 26 of whom weremarried all subjects lived in New York city area A questionnaire was prepared aimed at comparing theemployeesrsquo incentive with the other four in all 10 comparisons Each time one incentive is compared tothe other in the comparison a score is assigned to it ie a maximum of ten points is distributed amongthe five incentives Then the scores were tabulated thus against the five incentives the purpose of thequestionnaire was not disclosed to the subject till after completing itFindingsIn this study they have measured the attitudes of employees toward time incentives at the paidtechnique it was found that_ Advancement and security were the most important_ Incentives hours of work were the least important_ Salary was rated third by men 4th women_ Supervisor relationships were ranked fourth by men and third by women_ Married men considered security more important and advancement less important than didsingle men_ Married women were more interested in working fewer hours than were the single women_ The significance of advancement as an incentive decreased with age for both sexes andsecurity became more important with age_ Advancement and security were considered more important than salary and_ The attitudes of the employees changed depending on such major classifications as sex maritalstatus and ageMotivation 103

(b) Jurgensen Study His study involved 150 females and 1189 male applicants for positions atthe Minnea Polis Gas Light Company Each subject was asked to rank ten items in order of preferenceFindingsJob Preferences were affected by the extent of Education than by most other variablesAdvancement became more important and security less important as education increasedAccording to his findings wages hours and working conditions are not so important as generallythought and the type of work is more important than is ordinarily stated(c) Stagner Study The study included 7000 employees of a Nationwide Corporation After viewingvarious researchers he concludes that neither executives nor workers are concerned about pay as suchexcept when economically pinched At other times they prefer ego-satisfactions such as prestigerecognition and individual treatment He rated the importance by 7000 workers on various job factors(d) Jones and Jeffrey Study This is a study which evaluated preferences among electricalworkers for alternate form of job compensation They considered each of four different compensationdimensions listed belowHourly wage versus weekly wageMerit incentive versus non-merit incentivePiecework incentive versus no piecework incentive andRegular pay rate versus high pay rateFindingsNon-union workers significantly preferred the weekly wage the merit incentive the pieceworkincentive and the higher wage Union Members were willing to take jobs with non-merit incentive andregular pay in preference to jobs having merit incentives with higher pay They would forfeit money tostay clear of a merit system This would certainly seem to argue that the union as an organisationprovides the workers with some form of ldquogroup protectionrdquo or security that is worth a sacrifice inactual money units He no longer has to bargain for himself but is part of a larger body which bargainsin much broader terms(e) Nealey Study He examined work preference for different employee benefit programmes Hehad 1133 members of an electrical trade union panel compare the following six-benefit option1 The company will pay the cost of an additional 50 a month pension to be added to retirementbenefit2 I will get a percent raise3 The normal workweek shall be cut to 375 hrs Without any reduction in weekly earnings4 The company will pay the entire costs of full medical insurance for my family and myself5 It will be agreed that all regular employees must be members of the union and6 I will have three weeks paid vacation in a year in addition to my present vacation to the extravacation to be taken when I chooseThe six plans were chosen so as to be of approximately equal cost to the employerIn general the workers preferred medical insurance option and the union were unimpressed withthe enticement of 375 hours week104 Major FindingsThere is a tremendous increase in preference for the pension plan as one moves into older age groupsThe union is judged the most desirable (relative to other plans) among the middle-aged workersThe 3-week additional vacation was most preferred on a move through the older groups(f) DudychandashNaylor Study (1966) The study was designed to examine what job characteristicswere of primary importance to todayrsquos college studentsFindingsStudents in their sample gave the following order of job traits1 Pay2 Opportunity for growth and advancement3 Security4 Fellow employees5 Working conditions and

6 Supervisor-employee relationsThese were students who for most part had never held regular job and who were indicating whatthings they felt would be important when they did start choosing between job opportunities Theyplaced high weight to pay(g) Maslowrsquos View on Financial Incentives Maslowrsquos theory of motivation dismisses financeas a motivator He argued that money satisfies only lower needs (safety and psychological needs) let thehigher order needIn one survey he found that when managers were asked what factors they felt determined theirpay they responded training and experience were the most important factors

Theory X and Theory Y Douglas McGregor (1960)Douglas McGregor and MIT psychologist proposed two sets of assumptions about humanmotivation that a manager can hold McGregor called the assumptions Theory X and Theory Y Amanagerrsquos behaviour toward his workers and his management style will differ based on the assumptionsguiding his behaviour10487661048766The average person dislikes working and will avoid it if possible10487661048766Because people dislike working they must be directed tightly controlled and pressured to getthem to work toward organizational goals10487661048766The average person wants security avoids responsibility and has little ambition and10487661048766McGregor believed that many managers held Theory X assumption about workers Suchmanagers give their workers little latitude closely supervise them and punish poor performanceThey use few rewards and typically give only negative feedbackThe Theory Y assumptions are as follows10487661048766The average person does not dislike work it is as natural as play10487661048766If a person is committed to a set he will work towards them without an external control10487661048766Goal commitment follows from the satisfaction of a personrsquos desire to achieve10487661048766The average person can learn to accept responsibility Lack of ambition is not a basic humancharacteristic10487661048766Creativity ingenuity and imagination are human characteristics that are widely dispersed inthe population and10487661048766Modern organizations only partially use and tap the potentialities of its workersManagers who hold Theory Y assumptions have a positive view of people believe they have muchhidden potential and that people will work toward organizational goals These managers will give workersmore job responsibility and reply on self-motivation more than coercion These two sets of differentassumptions reigned in the academic literature for many years They were widely understood by practicingmanagers Although called a theory they are not theories as described earlier They are assumptions orbeliefs about human motivation that can strongly affect management behaviourThe Twentieth Centuryrsquos Management Guru Peter F Drucker (1995)Austrian born Peter F Drucker ranks among the most widely read and widely quoted managementscholars of the twentieth century Drucker is a professor of management a Claremont College in Californiaa post he has held since 1971 He has written almost 30 books and continued his writing activity into thelate 1990s His 1954 book The Practice of Management launched him as a significant managementwriter Among his most lasting observations was his proposed philosophy of management by objectivesand self-control General Electric was the first company to adopt management by objectives (MBO) andput it into practice with Druckerrsquos help as a consultant Drucker has an insatiable appetite for statisticsHe examines them for a pattern often finds pattern that others miss Here are his predictions for eventsunfolding until about 201010487661048766A rise in alliance partnership and joint ventures on a global scale Technology will help linkthese parts of an emerging ldquoNetwork Societyrdquo10487661048766A compelling need for decentralized organizations in an increasing uncertain environment10487661048766A related increased in the use of teams in organizationsOverview of Organization Behaviour in the New Millennium 15

10487661048766An increase in the number of knowledge workers (for example computer technologists andmedical workers) and continual decline in the number of blue-collar and agricultural workersin all developed free-marked countries The knowledge workers will need continuous learninga characteristic with implications for educational systems10487661048766The twenty-first century will see the evolution of knowledge societies in developed countriesThese societies will have three sectors Business government and nonprofit The last is newand helps peoplersquos social development Nonprofit volunteer activities will characterize Englishspeakingcountries but appear fewer elsewhere and10487661048766An unquestionable forming of a world economy in which world markets will become moreimportant than domestic markets

(b) Jurgensen Study His study involved 150 females and 1189 male applicants for positions atthe Minnea Polis Gas Light Company Each subject was asked to rank ten items in order of preferenceFindingsJob Preferences were affected by the extent of Education than by most other variablesAdvancement became more important and security less important as education increasedAccording to his findings wages hours and working conditions are not so important as generallythought and the type of work is more important than is ordinarily stated(c) Stagner Study The study included 7000 employees of a Nationwide Corporation After viewingvarious researchers he concludes that neither executives nor workers are concerned about pay as suchexcept when economically pinched At other times they prefer ego-satisfactions such as prestigerecognition and individual treatment He rated the importance by 7000 workers on various job factors(d) Jones and Jeffrey Study This is a study which evaluated preferences among electricalworkers for alternate form of job compensation They considered each of four different compensationdimensions listed belowHourly wage versus weekly wageMerit incentive versus non-merit incentivePiecework incentive versus no piecework incentive andRegular pay rate versus high pay rateFindingsNon-union workers significantly preferred the weekly wage the merit incentive the pieceworkincentive and the higher wage Union Members were willing to take jobs with non-merit incentive andregular pay in preference to jobs having merit incentives with higher pay They would forfeit money tostay clear of a merit system This would certainly seem to argue that the union as an organisationprovides the workers with some form of ldquogroup protectionrdquo or security that is worth a sacrifice inactual money units He no longer has to bargain for himself but is part of a larger body which bargainsin much broader terms(e) Nealey Study He examined work preference for different employee benefit programmes Hehad 1133 members of an electrical trade union panel compare the following six-benefit option1 The company will pay the cost of an additional 50 a month pension to be added to retirementbenefit2 I will get a percent raise3 The normal workweek shall be cut to 375 hrs Without any reduction in weekly earnings4 The company will pay the entire costs of full medical insurance for my family and myself5 It will be agreed that all regular employees must be members of the union and6 I will have three weeks paid vacation in a year in addition to my present vacation to the extravacation to be taken when I chooseThe six plans were chosen so as to be of approximately equal cost to the employerIn general the workers preferred medical insurance option and the union were unimpressed withthe enticement of 375 hours week104 Major FindingsThere is a tremendous increase in preference for the pension plan as one moves into older age groupsThe union is judged the most desirable (relative to other plans) among the middle-aged workersThe 3-week additional vacation was most preferred on a move through the older groups(f) DudychandashNaylor Study (1966) The study was designed to examine what job characteristicswere of primary importance to todayrsquos college studentsFindingsStudents in their sample gave the following order of job traits1 Pay2 Opportunity for growth and advancement3 Security4 Fellow employees5 Working conditions and

6 Supervisor-employee relationsThese were students who for most part had never held regular job and who were indicating whatthings they felt would be important when they did start choosing between job opportunities Theyplaced high weight to pay(g) Maslowrsquos View on Financial Incentives Maslowrsquos theory of motivation dismisses financeas a motivator He argued that money satisfies only lower needs (safety and psychological needs) let thehigher order needIn one survey he found that when managers were asked what factors they felt determined theirpay they responded training and experience were the most important factors

Theory X and Theory Y Douglas McGregor (1960)Douglas McGregor and MIT psychologist proposed two sets of assumptions about humanmotivation that a manager can hold McGregor called the assumptions Theory X and Theory Y Amanagerrsquos behaviour toward his workers and his management style will differ based on the assumptionsguiding his behaviour10487661048766The average person dislikes working and will avoid it if possible10487661048766Because people dislike working they must be directed tightly controlled and pressured to getthem to work toward organizational goals10487661048766The average person wants security avoids responsibility and has little ambition and10487661048766McGregor believed that many managers held Theory X assumption about workers Suchmanagers give their workers little latitude closely supervise them and punish poor performanceThey use few rewards and typically give only negative feedbackThe Theory Y assumptions are as follows10487661048766The average person does not dislike work it is as natural as play10487661048766If a person is committed to a set he will work towards them without an external control10487661048766Goal commitment follows from the satisfaction of a personrsquos desire to achieve10487661048766The average person can learn to accept responsibility Lack of ambition is not a basic humancharacteristic10487661048766Creativity ingenuity and imagination are human characteristics that are widely dispersed inthe population and10487661048766Modern organizations only partially use and tap the potentialities of its workersManagers who hold Theory Y assumptions have a positive view of people believe they have muchhidden potential and that people will work toward organizational goals These managers will give workersmore job responsibility and reply on self-motivation more than coercion These two sets of differentassumptions reigned in the academic literature for many years They were widely understood by practicingmanagers Although called a theory they are not theories as described earlier They are assumptions orbeliefs about human motivation that can strongly affect management behaviourThe Twentieth Centuryrsquos Management Guru Peter F Drucker (1995)Austrian born Peter F Drucker ranks among the most widely read and widely quoted managementscholars of the twentieth century Drucker is a professor of management a Claremont College in Californiaa post he has held since 1971 He has written almost 30 books and continued his writing activity into thelate 1990s His 1954 book The Practice of Management launched him as a significant managementwriter Among his most lasting observations was his proposed philosophy of management by objectivesand self-control General Electric was the first company to adopt management by objectives (MBO) andput it into practice with Druckerrsquos help as a consultant Drucker has an insatiable appetite for statisticsHe examines them for a pattern often finds pattern that others miss Here are his predictions for eventsunfolding until about 201010487661048766A rise in alliance partnership and joint ventures on a global scale Technology will help linkthese parts of an emerging ldquoNetwork Societyrdquo10487661048766A compelling need for decentralized organizations in an increasing uncertain environment10487661048766A related increased in the use of teams in organizationsOverview of Organization Behaviour in the New Millennium 15

10487661048766An increase in the number of knowledge workers (for example computer technologists andmedical workers) and continual decline in the number of blue-collar and agricultural workersin all developed free-marked countries The knowledge workers will need continuous learninga characteristic with implications for educational systems10487661048766The twenty-first century will see the evolution of knowledge societies in developed countriesThese societies will have three sectors Business government and nonprofit The last is newand helps peoplersquos social development Nonprofit volunteer activities will characterize Englishspeakingcountries but appear fewer elsewhere and10487661048766An unquestionable forming of a world economy in which world markets will become moreimportant than domestic markets

6 Supervisor-employee relationsThese were students who for most part had never held regular job and who were indicating whatthings they felt would be important when they did start choosing between job opportunities Theyplaced high weight to pay(g) Maslowrsquos View on Financial Incentives Maslowrsquos theory of motivation dismisses financeas a motivator He argued that money satisfies only lower needs (safety and psychological needs) let thehigher order needIn one survey he found that when managers were asked what factors they felt determined theirpay they responded training and experience were the most important factors

Theory X and Theory Y Douglas McGregor (1960)Douglas McGregor and MIT psychologist proposed two sets of assumptions about humanmotivation that a manager can hold McGregor called the assumptions Theory X and Theory Y Amanagerrsquos behaviour toward his workers and his management style will differ based on the assumptionsguiding his behaviour10487661048766The average person dislikes working and will avoid it if possible10487661048766Because people dislike working they must be directed tightly controlled and pressured to getthem to work toward organizational goals10487661048766The average person wants security avoids responsibility and has little ambition and10487661048766McGregor believed that many managers held Theory X assumption about workers Suchmanagers give their workers little latitude closely supervise them and punish poor performanceThey use few rewards and typically give only negative feedbackThe Theory Y assumptions are as follows10487661048766The average person does not dislike work it is as natural as play10487661048766If a person is committed to a set he will work towards them without an external control10487661048766Goal commitment follows from the satisfaction of a personrsquos desire to achieve10487661048766The average person can learn to accept responsibility Lack of ambition is not a basic humancharacteristic10487661048766Creativity ingenuity and imagination are human characteristics that are widely dispersed inthe population and10487661048766Modern organizations only partially use and tap the potentialities of its workersManagers who hold Theory Y assumptions have a positive view of people believe they have muchhidden potential and that people will work toward organizational goals These managers will give workersmore job responsibility and reply on self-motivation more than coercion These two sets of differentassumptions reigned in the academic literature for many years They were widely understood by practicingmanagers Although called a theory they are not theories as described earlier They are assumptions orbeliefs about human motivation that can strongly affect management behaviourThe Twentieth Centuryrsquos Management Guru Peter F Drucker (1995)Austrian born Peter F Drucker ranks among the most widely read and widely quoted managementscholars of the twentieth century Drucker is a professor of management a Claremont College in Californiaa post he has held since 1971 He has written almost 30 books and continued his writing activity into thelate 1990s His 1954 book The Practice of Management launched him as a significant managementwriter Among his most lasting observations was his proposed philosophy of management by objectivesand self-control General Electric was the first company to adopt management by objectives (MBO) andput it into practice with Druckerrsquos help as a consultant Drucker has an insatiable appetite for statisticsHe examines them for a pattern often finds pattern that others miss Here are his predictions for eventsunfolding until about 201010487661048766A rise in alliance partnership and joint ventures on a global scale Technology will help linkthese parts of an emerging ldquoNetwork Societyrdquo10487661048766A compelling need for decentralized organizations in an increasing uncertain environment10487661048766A related increased in the use of teams in organizationsOverview of Organization Behaviour in the New Millennium 15

10487661048766An increase in the number of knowledge workers (for example computer technologists andmedical workers) and continual decline in the number of blue-collar and agricultural workersin all developed free-marked countries The knowledge workers will need continuous learninga characteristic with implications for educational systems10487661048766The twenty-first century will see the evolution of knowledge societies in developed countriesThese societies will have three sectors Business government and nonprofit The last is newand helps peoplersquos social development Nonprofit volunteer activities will characterize Englishspeakingcountries but appear fewer elsewhere and10487661048766An unquestionable forming of a world economy in which world markets will become moreimportant than domestic markets

10487661048766An increase in the number of knowledge workers (for example computer technologists andmedical workers) and continual decline in the number of blue-collar and agricultural workersin all developed free-marked countries The knowledge workers will need continuous learninga characteristic with implications for educational systems10487661048766The twenty-first century will see the evolution of knowledge societies in developed countriesThese societies will have three sectors Business government and nonprofit The last is newand helps peoplersquos social development Nonprofit volunteer activities will characterize Englishspeakingcountries but appear fewer elsewhere and10487661048766An unquestionable forming of a world economy in which world markets will become moreimportant than domestic markets