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Organisational Behaviour

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MM5 Formative Assignment

Name: Justin Har Date: 7 November 2014

Question: a. Describe two theories that relate to motivation at work. 20% b. Outline the implications of your selected theories for managers. 30% c. Examine the limitations of using theories of motivation when managing organizations. 50% Motivation can be defined as the processes that account for an individual’s intensity, direction, and persistence of effort toward attaining a goal (Pinder, 1998). Motivation is one of the most frequently researched topics in organizational behavior (Latham and Pinder, 2005) and over the years, several theories have been coined and widely used by managers in their organisations. In 1950, 4 theories of employee motivation were formulated and one of them is Herzberg’s Two-­‐Factor Theory of Motivation. The Two-­‐Factor Theory of Motivation, or motivation-­‐hygiene theory, was proposed by Frederick Herzberg in 1959. The theory states that there exist certain job factors that lead to satisfaction while others prevent dissatisfaction. According to Herzberg, the opposite of “satisfaction” is not “dissatisfaction” but “no satisfaction”. Similarly, the opposite of dissatisfaction is no dissatisfaction. Herzberg then classified these job factors into two categories: hygiene factors and motivational factors based on the responses he collected from numerous employees when asked to describe in detail situations in which they felt exceptionally good or bad about their jobs (Herzberg, Mausner and Snyderman, 1959).

Hygiene factors are job factors which are vital for motivation to exist at the work place. These factors do not result in positive satisfaction and should not be considered as motivators. However, the absence of these factors results in dissatisfaction. These factors tend to be extrinsic to work and are also called dissatisfiers or maintenance factors as they are required to avoid dissatisfaction. Some examples of hygiene factors include pay and physical working conditions. Motivational factors, on the other hand, are job factors which yield positive satisfaction. These factors are intrinsic to work and they motivate the employees to produce superior performance. These factors are also called satisfiers. Some examples of motivational factors are recognition and growth and promotional opportunities. The assertion that satisfaction is not the opposite of dissatisfaction would result in managers trying in vain to bring about motivation through the elimination of factors that can create job dissatisfaction. Managers who subscribe to the Two-­‐Factor Theory tend to focus their efforts ensuring that the hygiene factors are adequately

met so as to avoid employee dissatisfaction. Once that is achieved, they then look into finding ways to make work allocated stimulating and rewarding so as to motivate employees to work harder and perform better. There is an implicit emphasis on job-­‐enrichment so as to motivate the employees. As such, managers are inclined to create jobs that maximize the utility of employee skills and competencies since they have to focus on motivational factors in order to improve work-­‐quality.

However, there are several limitations the Two-­‐Factor Theory face as elaborated by R. J. House and L. A. Wigdor (1970). First off, the two-­‐factor theory does not take into consideration the existence of situational variables. Second, the theory works based on the assumption that a correlation exists between satisfaction and productivity. Furthermore, the bulk of Herzberg’s research focused on satisfaction and ignored productivity. Third, the reliability of this theory is called into question since the analysis of the surveys carried out were made by the raters who might distort the findings by analysing a same response in different ways. In addition, Herzberg did not provide a comprehensive measure of satisfaction in his studies. This gives rise to the issue where an employee might find his job acceptable despite that he might hate or object to part of this job. Also, since Two-­‐Factory Theory is based on the natural reactions of employees at the point the surveys were carried out with questions which looked to find out information regarding the sources of satisfaction and dissatisfaction at work, it is not free from biased. Employees would tend to blame dissatisfaction on external factors such as salary structure, company police and peer relationships. On top of that, employees would credit themselves for the satisfaction they get at work. Lastly, the Two-­‐Factory Theory seems to exclude blue-­‐collar workers and hence should not be applied to employees who fall under that category.

A study carried out on the Irish Health service also highlighted that over time, certain motivational factors might become hygiene factors as the workers start to perceive them as entitlements (Byrne, 2006). For example, while providing incentives such as opportunities for promotion and personal growth can maintain growth, as might re-­‐ engineering of jobs so that work becomes meaningful, once the workers viewed these as entitlements, they become hygiene factors and lose their effect as motivators. Hence, Bryne concluded that Herzberg’s Two-­‐Factor Theory does not reflect certain realities of the modern health care work environment.

Nevertheless, Herzberg’s Two-­‐Factor theory is still widely accepted by many managers. The falling out of many of the early theories of motivation when they could not hold up under close examination resulted in the rise of several contemporary theories of motivation. These contemporary theories had, in contrast to most of the pioneer theories, reasonable degrees of valid supporting documentation. They also tended to fit in more with the current state of thinking in explaining employee motivation. One example of such a contemporary theory would be Victor Vroom’s Expectancy Theory, published in 1964. Vroom’s theory states that employee’s motivation is an

outcome of three factors: Valence – how much an individual wants a reward or the significance associated with the expected outcome, Expectancy – the assessment of the likelihood that effort will result in expected performance or the faith that better efforts will results in better performance, and Instrumentality – the belief that the performance will lead to reward or the faith that a good performance would necessarily lead to a reward.

From these 3 factors, the expectancy theory is based on 3 main relationships: First, the Effort-­‐Performance relationship which measures the likelihood that the individual’s effort is going to be recognized in his performance appraisal; second, the Performance-­‐Reward relationship which measures the extent to which employees believe that achieving good performance appraisal leads to organizational rewards; third, the Reward-­‐Personal goals relationship which measures the attractiveness or appeal of the potential reward to the individual. Vroom believed that employees continuously decide whether to perform or not at their jobs. This decision is based on the individual’s motivation level which in turn is dependent on the three factors: expectancy, valence and instrumentality. An example of how managers can use the Expectancy Theory can be seen in the incentive structure in place in a trade floor (Nocera, 2006). Stock analysts working on a trade floor get paid for being able to forecast a stock’s future price – the accuracy of their recommendations to buy, hold or sell determines if they were to stay or get fired. In reality, Analysts are observed to place a minimal number of sell ratings on stocks as stocks are falling at similar frequencies as they rise. The Expectancy Theory explains this phenomenon stating that analysts would have to balance their decision to sell stocks between the benefits they would reap should they be accurate and the risks involved when they are inaccurate resulting in them incurring the stockowners’ wrath. These would include public rebuke, professional blackballing and exclusion from information. The same behavior is not noticed when these Analysts place a decision to buy a rating on a particular stock as the owners of these stocks would be delighted when these recommendations entice investors to put money into their companies. Managers can then manipulate the behavior of their Analysts by varying the difference in the incentives they issue to the analyst when they buy, sell or hold their ratings – by manipulating the expected outcomes for each decision, the Analysts would behave differently. For example, should the expected outcome of sell ratings overweigh that of buy ratings, Analysts would be more inclined to make sell recommendations than buy recommendations which is the opposite of what is observed at status quo.

The Expectancy Theory allows managers to correlate their preferred outcomes to the aimed performance levels by utilizing the three main relationships. However, the theory also implies that managers have to strive to ensure that their targeted performance levels are within achievable limits for the employees. The theory also affects the way managers give out rewards to the employees – they have to ensure that deserving employees are rewarded for their performances. In addition to that, the reward system has to be free from bias in the organization. Managers must also strive to design interesting, dynamic and challenging jobs. Finally, managers should

continually assess the motivation levels of the employees through various techniques such as surveys, personal interview and other ways. Vroom’s Expectancy Theory differs from the “older” theories of motivation such as Herzberg’s Two-­‐Factor theory in that it does not provide suggestions on what motivates employees. Rather, his theory provides a process of cognitive variables that reflect individual differences in work motivation and suggests motivating employees through the alteration of their expectations (Lunenburg, 2011). Nonetheless, there are also limitations which the Expectancy Theory faces (Heneman and Schwab, 1972). Firstly, since the Expectancy Theory is based on individuals who are self-­‐motivated and want to achieve maximum satisfaction and minimize dissatisfaction, it is often deemed to be idealistic. It emphasizes a lot on psychological extravagance where the final objective of individuals is to attain maximum pleasure and least pain. In addition, it is commonly perceived that in reality only a minority of individuals acknowledge the correlation between performance and rewards. The expectancy theory stresses upon the expectations and perceptions of the employees; this tends to discredit real and actual facts. While managers could possibly exploit this aspect of the theory and strive to manipulate the perspectives employees take on their work, it also makes it difficult as these means are subjective and what might work for one employee, might have negative impacts on another. Finally, the application of this theory is limited as rewards are not directly correlated with performance in many organisations. In most organisations, reward is related to other factors such as position, effort, responsibility and education. While these motivational theories are useful tools for managers to evaluate the way they modify and design jobs for their employees to maximize their productivity and performance, it should be noted that these are but theories and caution must be taken during their application. These theories are not “one-­‐size-­‐fit-­‐all” solutions and managers should keep the limitations of each in mind and apply them on a case-­‐by-­‐ case basis. Managers should aspire to understand the different theories so as to equip themselves with a range of options they can take to achieve their goals – be it by implementing specific actions considering factors (as suggested by the more traditional theories such as the Two-­‐Factor Theory) or through the alteration of the perceptions employees have on their jobs (as suggested by the Expectancy Theory).…...

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