Unit 2: Human Resource Management
2.4 - Motivation and Demotivation
Understanding Employee Motivation Theories, Rewards, and Training
Introduction: What is Motivation?
Motivation is the internal and external factors that stimulate desire and energy in employees to be continually interested and committed to their work, making effort to achieve organizational goals.
Why motivation matters:
- Increased productivity: Motivated employees work harder and more efficiently
- Better quality: Engaged workers produce higher quality output
- Lower absenteeism: Motivated staff are less likely to miss work
- Reduced turnover: Satisfied employees stay longer
- Innovation: Motivated workers contribute ideas and improvements
- Customer satisfaction: Happy employees create positive customer experiences
- Competitive advantage: Engaged workforce drives business success
Motivation vs. Demotivation
Demotivation occurs when factors cause employees to lose interest, enthusiasm, and commitment to their work.
Signs of demotivation:
- Decreased productivity and quality
- Increased absenteeism and lateness
- High staff turnover
- Negative attitude and complaints
- Lack of initiative or creativity
- Poor teamwork and cooperation
Common causes of demotivation:
- Poor management and leadership
- Lack of recognition or appreciation
- Unfair treatment or favoritism
- Limited career advancement opportunities
- Inadequate pay and benefits
- Poor working conditions
- Unclear expectations or role ambiguity
1. Motivational Theories
A. Maslow's Hierarchy of Needs
Abraham Maslow (1943) proposed that human needs are arranged in a hierarchy, from basic to complex. People are motivated to fulfill lower-level needs before moving to higher levels.
The Five-Level Pyramid (from bottom to top):
Level 1: Physiological Needs (Base of Pyramid)
Definition: Basic survival needs
- Food, water, shelter, sleep
- Warmth and rest
- Health and well-being
In workplace:
- Adequate salary to afford basics
- Safe working environment
- Reasonable working hours
- Break times for meals and rest
- Comfortable temperature and facilities
Level 2: Safety and Security Needs
Definition: Protection from danger and uncertainty
- Physical safety
- Financial security
- Health and well-being
- Stability and order
In workplace:
- Job security (permanent contracts)
- Safe working conditions
- Health and safety regulations
- Pension plans and benefits
- Clear organizational structure
- Fair and consistent policies
Level 3: Social Needs (Love and Belonging)
Definition: Need for relationships, friendship, and acceptance
- Friendship and companionship
- Love and affection
- Sense of belonging
- Social interaction
In workplace:
- Teamwork and collaboration
- Positive workplace culture
- Social events and activities
- Supportive management
- Good relationships with colleagues
- Sense of being part of organization
Level 4: Esteem Needs
Definition: Need for respect, recognition, and self-worth
- Self-respect and confidence
- Recognition and appreciation
- Achievement and accomplishment
- Status and reputation
In workplace:
- Recognition and praise for good work
- Promotions and advancement
- Job titles and status symbols
- Responsibility and autonomy
- Performance bonuses and awards
- Respect from colleagues and managers
Level 5: Self-Actualization (Top of Pyramid)
Definition: Realizing one's full potential and creative capacity
- Personal growth and development
- Creativity and innovation
- Problem-solving and challenges
- Achieving one's goals
In workplace:
- Challenging and meaningful work
- Opportunities for creativity
- Training and development programs
- Career advancement to senior positions
- Autonomy and empowerment
- Making significant contributions
Key Principles of Maslow's Theory
- Hierarchy progression: Lower needs must be satisfied before higher needs become motivators
- Deficiency needs: Levels 1-4 are deficiency needs (must be met to avoid dissatisfaction)
- Growth needs: Level 5 is a growth need (drives personal development)
- Individual differences: Not everyone reaches self-actualization
- Multiple needs: People can be at different levels for different needs simultaneously
Evaluation of Maslow's Theory
Advantages:
- Easy to understand and apply
- Recognizes different types of needs
- Highlights importance of higher-level needs
- Useful framework for managers
Disadvantages/Criticisms:
- Rigid hierarchy may not apply to everyone (cultural differences)
- People may prioritize different needs (artist may prioritize creativity over security)
- Difficult to measure and test scientifically
- Doesn't account for external factors (economic conditions)
- Self-actualization vague and hard to define
B. Taylor's Scientific Management
Frederick Winslow Taylor (1911) believed workers are primarily motivated by money and can be made more productive through scientific analysis of work tasks.
Core assumptions:
- Workers are naturally lazy ("economic man")
- Money is the primary motivator
- Workers don't enjoy work—they work only for pay
- Workers need close supervision
Taylor's Principles of Scientific Management
1. Division of Labor and Specialization
- Break work into small, simple tasks
- Each worker specializes in one task
- Increases speed and efficiency
2. Scientific Selection and Training
- Select workers best suited for each task
- Train workers in most efficient methods
- One best way to perform each task
3. Performance-Based Pay
- Piece-rate pay system
- Pay workers based on output
- Incentivizes higher productivity
4. Separation of Planning and Doing
- Managers plan and supervise
- Workers execute tasks
- Clear hierarchy and authority
Piece-Rate Pay Formula
Example:
- • Worker produces 100 units per day
- • Rate = $0.50 per unit
- • Daily pay = 100 × $0.50 = $50
If worker increases output to 120 units, pay increases to $60
Evaluation of Taylor's Theory
Advantages:
- Increased productivity and efficiency
- Clear performance standards
- Reduced waste and costs
- Higher pay for more productive workers
- Systematic approach to management
Disadvantages/Criticisms:
- Oversimplifies human motivation (money not only factor)
- Ignores social and psychological needs
- Repetitive work causes boredom and demotivation
- Workers treated as machines, not humans
- No autonomy or creativity
- May sacrifice quality for quantity
- Can lead to worker exploitation
- Doesn't work well for complex or creative tasks
C. Herzberg's Two-Factor Theory (Motivation-Hygiene Theory)
Frederick Herzberg (1959) researched what makes workers satisfied or dissatisfied. He discovered two separate sets of factors:
- Hygiene factors: Factors that can cause dissatisfaction if absent, but don't motivate if present
- Motivators: Factors that actually motivate and create job satisfaction
Key insight: The opposite of satisfaction is NOT dissatisfaction. They are separate dimensions.
Hygiene Factors (Dissatisfiers)
Definition: Basic factors related to job context—their absence causes dissatisfaction, but their presence doesn't motivate
Examples:
- Company policies: Fair and clear rules
- Supervision: Competent and fair management
- Salary: Adequate and fair pay
- Working conditions: Safe, clean, comfortable environment
- Job security: Stable employment
- Relationships: Good relations with colleagues and supervisors
- Status: Appropriate job title and respect
Effect:
- If present → No dissatisfaction (neutral state)
- If absent → Dissatisfaction and complaints
- Cannot create motivation, only prevent demotivation
Motivators (Satisfiers)
Definition: Factors related to job content—their presence creates satisfaction and motivation
Examples:
- Achievement: Completing challenging tasks successfully
- Recognition: Praise and appreciation for good work
- Work itself: Interesting, meaningful, and challenging tasks
- Responsibility: Autonomy and authority
- Advancement: Promotion and career progression
- Personal growth: Learning and development opportunities
Effect:
- If present → Satisfaction and motivation
- If absent → No satisfaction (but not necessarily dissatisfied)
- Actually drive employee motivation and engagement
Herzberg's Key Recommendations: Job Enrichment
Job enrichment means making work more challenging and meaningful by adding motivators
Methods:
- Increase autonomy: Give workers more control over how they work
- Add responsibility: Allow decision-making authority
- Provide feedback: Direct information on performance
- Offer complete tasks: Whole projects rather than fragments
- Increase variety: Diverse tasks to reduce monotony
- Remove controls: Reduce supervision while maintaining accountability
Note: Job enrichment differs from job enlargement (just adding more similar tasks, which doesn't motivate)
Evaluation of Herzberg's Theory
Advantages:
- Recognizes that pay alone doesn't motivate
- Highlights importance of job design
- Practical applications (job enrichment)
- Focuses on intrinsic motivation
- Explains why raises don't create lasting motivation
Disadvantages/Criticisms:
- Clear distinction between hygiene and motivators not always evident
- Individual differences ignored (some workers prefer routine)
- Cultural variations (money may be motivator in some cultures)
- Based on specific sample (accountants and engineers)
- Doesn't consider situational factors
Comparison of Motivation Theories
| Theory | Key Idea | Main Motivator | Application |
|---|---|---|---|
| Maslow | Hierarchy of five needs | Depends on level (physiological → self-actualization) | Identify and address unmet needs |
| Taylor | Workers are economic man | Money (piece-rate pay) | Performance-based pay, efficiency, supervision |
| Herzberg | Two separate factors: hygiene and motivators | Achievement, recognition, responsibility, growth | Job enrichment, focus on work content |
2. Financial Rewards
Financial rewards are monetary benefits used to compensate and motivate employees.
Types of Financial Rewards
1. Salary
Definition: Fixed annual payment, typically paid monthly
- Regular, predictable income
- Usually for professional/managerial positions
- Not based on hours worked
Advantages: Security, stability, predictable budgeting
Disadvantages: May not incentivize extra effort, no direct link to performance
2. Wages (Hourly Pay)
Definition: Payment based on hours worked
\[ \text{Total Pay} = \text{Hours Worked} \times \text{Hourly Rate} \]- Common for manual/clerical workers
- Includes overtime pay (usually time-and-a-half or double time)
Advantages: Fair for variable hours, rewards extra work
Disadvantages: Income uncertainty, focus on hours not productivity
3. Commission
Definition: Payment based on sales made
\[ \text{Commission} = \text{Sales Value} \times \text{Commission Rate} \]- Common in sales positions
- Can be sole income or supplement to base salary
Example: Real estate agent earns 3% of property sale price
Advantages: Directly motivates sales, high earnings potential
Disadvantages: Income instability, pressure, may prioritize quantity over customer service
4. Piece Rate
Definition: Payment per unit produced
\[ \text{Pay} = \text{Units Produced} \times \text{Rate per Unit} \]- Links pay directly to output
- Common in manufacturing, agriculture
Advantages: Motivates productivity, rewards efficient workers
Disadvantages: May sacrifice quality, workers rush, physical strain
5. Performance-Related Pay (PRP) / Bonuses
Definition: Additional payment for meeting or exceeding targets
- Annual bonuses based on individual/team/company performance
- Tied to specific metrics (sales, profit, productivity)
Advantages: Aligns employee and business goals, rewards high performers
Disadvantages: Demotivates if unachievable, subjective assessment issues, short-term focus
6. Profit Sharing
Definition: Employees receive share of company profits
- Usually annual distribution
- Proportional to salary or equal distribution
Advantages: Encourages teamwork, aligns interests with company success
Disadvantages: Individual contribution unclear, profits may fluctuate due to external factors
7. Share Ownership / Stock Options
Definition: Employees given or allowed to buy company shares
- Become part-owners of company
- Benefit from share price increases and dividends
Advantages: Long-term motivation, retention, alignment with shareholders
Disadvantages: Complex to understand, share prices may fall, benefits delayed
8. Fringe Benefits (Perks)
Definition: Non-cash financial benefits
- Company car or car allowance
- Health insurance and medical benefits
- Pension/retirement plans
- Subsidized meals or gym memberships
- Discounts on company products
- Housing allowance
Advantages: Valuable to employees, tax-efficient, enhances package
Disadvantages: Expensive for employer, may not suit all employees
Effectiveness of Financial Rewards
When financial rewards work well:
- Meeting basic needs (lower Maslow levels)
- Simple, measurable tasks
- Short-term productivity boosts
- Attracting and retaining employees
Limitations of financial rewards:
- Temporary effect—motivation fades
- Can become expected entitlement
- May not address root causes of demotivation
- Expensive for employer
- Doesn't address higher-level needs (esteem, self-actualization)
- Can create unhealthy competition
3. Non-Financial Rewards
Non-financial rewards are non-monetary methods of motivating employees that address psychological and social needs.
Often more sustainable than financial rewards and address Herzberg's motivators
Types of Non-Financial Rewards
1. Job Enrichment
- Adding meaningful tasks and responsibility
- Increasing autonomy and decision-making
- Providing complete tasks rather than fragments
- Opportunities for personal growth
Effect: Increases job satisfaction, reduces boredom
2. Job Rotation
- Moving employees between different tasks/positions
- Increases variety and skills
- Prevents monotony
Effect: Develops versatile employees, maintains interest
3. Job Enlargement
- Adding more tasks at same level
- Horizontal expansion of duties
Note: Less effective than enrichment (just more work, not more meaningful)
4. Empowerment
- Giving employees authority to make decisions
- Delegating responsibility
- Trusting employees' judgment
- Reducing need for management approval
Effect: Increases ownership, motivation, and responsiveness
5. Teamwork
- Collaborative work environment
- Shared goals and responsibilities
- Team-based projects
Effect: Addresses social needs, improves communication, innovation
6. Flexible Working Arrangements
- Flextime: Choose start/end times within limits
- Part-time work: Reduced hours
- Job sharing: Two people share one position
- Remote work/telecommuting: Work from home
- Compressed workweek: Full-time hours in fewer days
Effect: Work-life balance, reduces stress, accommodates personal needs
7. Recognition and Praise
- Verbal appreciation and acknowledgment
- Employee of the month awards
- Public recognition in meetings or newsletters
- Thank-you notes from management
- Certificates of achievement
Effect: Meets esteem needs, reinforces positive behavior, costs little
8. Opportunities for Advancement
- Clear career progression paths
- Promotion opportunities
- Succession planning
- Internal recruitment
Effect: Long-term motivation, retention, ambition
9. Training and Development
- Skills training programs
- Professional development courses
- Mentoring and coaching
- Conference attendance
- Further education support
Effect: Personal growth, increased competence, career preparation
10. Purpose and Meaningful Work
- Connecting work to larger purpose
- Contribution to society or important cause
- Corporate social responsibility involvement
- Clear vision and mission alignment
Effect: Self-actualization, fulfillment, engagement
4. Types of Training
Training is the process of teaching employees the skills and knowledge needed to perform their jobs effectively.
Benefits of training:
- Improved performance and productivity
- Higher quality work
- Increased employee motivation and confidence
- Reduced errors and waste
- Preparation for promotion
- Adaptation to new technology
- Employee retention
A. On-the-Job Training
Definition: Training that takes place in the workplace while performing actual job tasks
Methods:
- Demonstration and practice: Trainer shows, employee practices
- Job shadowing: Observe experienced worker
- Mentoring: Guidance from senior colleague
- Job rotation: Learn different roles
- Coaching: One-on-one instruction
Advantages:
- Cost-effective (no external venue or materials)
- Relevant and practical (real work environment)
- Immediate application of learning
- Productive during training (work still done)
- Can be tailored to individual needs
- Builds relationships with colleagues
Disadvantages:
- Trainer may lack teaching skills
- Disrupts workflow
- May learn bad habits from trainer
- Limited to available equipment/situations
- Inconsistent quality
- Potential safety risks during learning
B. Off-the-Job Training
Definition: Training conducted away from the workplace, in a dedicated training facility or external institution
Methods:
- Classroom lectures: Theoretical instruction
- Workshops and seminars: Interactive sessions
- E-learning/online courses: Digital training modules
- Simulations: Practice in controlled environment
- External courses: University or professional programs
- Conferences: Industry events and networking
Advantages:
- Expert trainers with teaching skills
- Structured and comprehensive programs
- No workplace distractions
- Access to specialized equipment/resources
- Standardized quality
- Can practice without consequences
- Networking opportunities
- Recognized qualifications/certifications
Disadvantages:
- Expensive (trainer fees, venue, materials, travel)
- Time away from work (lost productivity)
- May not be directly relevant to specific job
- Theory-heavy, less practical application
- Can be generic rather than customized
Comparison: On-the-Job vs. Off-the-Job Training
| Aspect | On-the-Job Training | Off-the-Job Training |
|---|---|---|
| Location | At workplace | Away from workplace |
| Cost | Lower | Higher |
| Relevance | Highly practical | More theoretical |
| Productivity | Work continues | Lost productivity |
| Quality | Variable | Standardized |
| Best For | Job-specific skills, new employees | Complex skills, professional development |
Induction Training
Induction (orientation) is the process of introducing new employees to the organization, their role, and workplace culture.
Content typically includes:
- Company history, mission, and values
- Organizational structure
- Policies and procedures
- Health and safety regulations
- Tour of facilities
- Introduction to colleagues
- Job responsibilities and expectations
- IT systems and equipment
Importance:
- Reduces anxiety and uncertainty
- Faster integration into team
- Clarifies expectations
- Reduces early turnover
- Ensures compliance with regulations
Integrating Motivation Theory with Practice
Practical Application: Using Multiple Approaches
Effective motivation strategies combine financial and non-financial rewards based on employee needs:
For lower-level employees (Maslow's physiological/safety needs):
- Competitive wages and benefits
- Job security
- Safe working conditions
- Clear policies
For mid-level employees (social/esteem needs):
- Teamwork opportunities
- Recognition programs
- Performance bonuses
- Promotion prospects
For senior employees (self-actualization):
- Challenging projects
- Autonomy and empowerment
- Leadership opportunities
- Strategic involvement
✓ Unit 2.4 Summary: Motivation and Demotivation
You should now understand the major motivation theories: Maslow's hierarchy of needs (five levels from physiological to self-actualization), Taylor's scientific management (workers motivated by money through piece-rate systems), and Herzberg's two-factor theory (hygiene factors prevent dissatisfaction while motivators create satisfaction through job enrichment). Financial rewards include salary, wages, commission, piece rate, bonuses, profit sharing, and fringe benefits, while non-financial rewards encompass job enrichment, empowerment, recognition, flexibility, and meaningful work. Training can be on-the-job (practical, cost-effective, workplace-based) or off-the-job (structured, expert-led, external venue). Effective motivation strategies combine multiple approaches tailored to different employee needs levels, recognizing that sustainable motivation often comes from addressing higher-level psychological needs rather than just financial incentives. Understanding these theories and applications is essential for managing human resources effectively and creating engaged, productive workforces.