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Unformatted text preview: Chapter 5 T heories of
Work Motivation Learning Objectives
After reading Chapter 5, you should be able to:
1 Define motivation, discuss its basic proper- ties, and distinguish it from performance.
2 Compare and contrast intrinsic and extrinsic motivation.
3 Explain and discuss the different factors that predict performance and define general cognitive ability and emotional intelligence.
4 Explain and discuss need theories of motiva- tion.
5 Explain and discuss expectancy theory.
6 Explain and discuss equity theory.
7 Explain and discuss goal setting theory.
8 Discuss the cross-cultural limitations of theo- ries of motivation.
9 Summarize the relationship among the var- ious theories of motivation, performance, and
job satisfaction. Employees at Starbucks Coffee Co., the
world’s largest chain of coffee shops, do
not just serve up coffee to customers.
Rather, these “partners,” as they are
called, are actively involved in the company and are credited with finding new and
innovative ways to cut costs and save the
company money and increase sales. Their
efforts appear to be making a difference. Starbucks stock is up more than
800 percent since the company went public in 1992, and sales and profits
have been growing more than 50 percent a year. There are more than 7,000
Starbucks stores worldwide, including stores in Tokyo, Singapore, and
Great Britain, and three to four new stores open almost every day.
Starbucks stores can be found in almost every major metropolitan area in
the United States, and its blend of coffee is available in restaurants, hotels,
offices, and airlines (not to mention a Starbucks brand of coffee ice cream
and compact discs).
Some might argue that Starbucks’ chairperson and CEO, Howard Schultz,
who purchased the company for $4 million in 1987, was in the right place at
the right time. After all, 10 years ago a coffee shop was, well, just a place
to get a coffee, not somewhere you would go to relax and hang out with a
“cuppa-joe.” However, take a closer look inside Starbucks, and what you
see will amaze you. Rated among the top 10 on F ortune magazine’s most
recent list of “America’s Most Admired Companies,” and the magazine’s
most admired food-services company in 2001 and 2002, Starbucks’ mission
statement includes providing a great work environment, treating people
with respect and dignity, a commitment to diversity, and making all
employees partners. 133 A stock option plan, recognition
programs, and a comprehensive
work–life benefits program have
helped Starbucks create an
inspired, enthusiastic, and
motivated workforce. The hourly pay at Starbucks is better than other entry-level food service jobs. But the real
difference is the company’s “bean stock” program, a stock-option plan that makes every
employee of Starbucks a partner and links employee contributions to company profits.
Starbucks became one of the first service companies to offer stock options. All employees,
from top management down, are awarded stock options. Beginning in 1991, each employee
was awarded stock options worth 12 percent of their base pay, which has since risen to 14
percent, thanks to healthy profits. A stock investment plan allows employees to buy shares
at a discount through payroll deductions. In addition, recognition programs reward outstanding achievement for upholding Starbucks’ mission and goals.
Starbucks also has a comprehensive work–life benefits program that includes on-site fitness services and educational support for child care and elder care. All employees who work
a minimum of 20 hours a week are entitled to universal benefits packages, including full
medical and dental coverage, vision care, and disability and life insurance—perks that are
usually reserved only for those in the managerial ranks.
To stay attuned to the needs and desires of employees, Starbucks conducts regular opinion
surveys and open forums in order to be able to provide programs that address employees’
life stages and personal needs. For example, in response to the growing number of
employees starting families, Starbucks offers flexible work schedules. As well, a number of
“nontraditional” benefits have been designed, including a program that links employees
with similar interests and hobbies. The objective is to provide a range of work/life solutions
that meet the multiple life demands of employees. Not surprisingly, the job satisfaction of
Starbucks employees is much higher than most companies, and turnover is lower than at
most fast-food restaurants.
The Starbucks’ formula appears to be straightforward: Take care of your people, they will
take care of your customers, and the bottom line will grow. What is not so straightforward
is the creation of an inspired, enthusiastic, and motivated workforce that shares a common Starbucks Coffee Co.
www.starbucks.com 134 purpose, is treated like business partners, and shares the rewards of the company’s success. Is it any wonder that Starbucks met its goal of becoming a $1 billion company and
received W orkforce m agazine’s Quality of Life Optimas award in 2003! 1 Would you be motivated if you worked at Starbucks? What kind of person would
respond well to Starbucks’ motivational techniques? What underlying philosophy of
motivation is Starbucks using? These are some of the questions that this chapter will
First, we will define motivation and distinguish it from performance. After this,
we will describe several popular theories of work motivation and contrast them.
Then we will explore whether these theories translate across cultures. Finally, we
will present a model that links motivation, performance, and job satisfaction. Why Study Motivation?
Why should you study motivation? Motivation is one of the most traditional topics
in organizational behaviour, and it has interested managers, researchers, teachers,
and sports coaches for years. However, a good case can be made that motivation has
become even more important in contemporary organizations. Much of this is a result
of the need for increased productivity to be globally competitive (as at Starbucks). It
is also a result of the rapid changes that contemporary organizations are undergoing.
Stable systems of rules, regulations, and procedures that once guided behaviour are
being replaced by requirements for flexibility and attention to customers that necessitate higher levels of initiative. This initiative depends on motivation.
What would a good motivation theory look like? In fact, as we shall see, there
is no single all-purpose motivation theory. Rather, we will consider several theories
that serve somewhat different purposes. In combination, though, a good set of theories should recognize human diversity and consider that the same conditions will
not motivate everyone. Also, a good set of theories should be able to explain how it
is that some people seem to be self-motivated, while others seem to require external
motivation. Finally, a good set of theories should recognize the social aspect of
human beings—people’s motivation is often affected by how they see others being
treated. Before getting to our theories, let us define motivation more precisely. What Is Motivation?
The term motivation is not easy to define. However, from an organization’s perspective, when we speak of a person as being motivated, we usually mean that the
person works “hard,” “keeps at” his or her work, and directs his or her behaviour
toward appropriate outcomes. Basic Characteristics of Motivation
Motivation. The extent to which
persistent effort is directed
toward a goal. We can formally define motivation as the extent to which persistent effort is
directed toward a goal.2 Chapter 5 Theories of Work Motivation 135 Effort. The first aspect of motivation is the strength of the person’s work-related
behaviour or the amount of effort the person exhibits on the job. Clearly, this
involves different kinds of activities on different kinds of jobs. A loading dock
worker might exhibit greater effort by carrying heavier crates, while a researcher
might reveal greater effort by searching out an article in some obscure foreign technical journal. Both are exerting effort in a manner appropriate to their jobs.
Persistence. The second characteristic of motivation is the persistence that individuals exhibit in applying effort to their work tasks. The organization would not
be likely to think of the loading dock worker who stacks the heaviest crates for two
hours and then goofs off for six hours as especially highly motivated. Similarly, the
researcher who makes an important discovery early in her career and then rests on
her laurels for five years would not be considered especially highly motivated. In
each case, workers have not been persistent in the application of their effort.
Direction. Effort and persistence refer mainly to the quantity of work an individual produces. Of equal importance is the quality of a person’s work. Thus, the
third characteristic of motivation is the direction of the person’s work-related
behaviour. In other words, do workers channel persistent effort in a direction that
benefits the organization? Employers expect motivated stockbrokers to advise their
clients of good investment opportunities and motivated software designers to design
software, not play computer games. These correct decisions increase the probability
that persistent effort is actually translated into accepted organizational outcomes.
Thus, motivation means working smart as well as working hard.
Goals. Ultimately, all motivated behaviour has some goal or objective toward
which it is directed. We have presented the preceding discussion from an organizational perspective—that is, we assume that motivated people act to enhance organizational objectives. In this case, employee goals might include high productivity,
good attendance, or creative decisions. Of course, employees can also be motivated
by goals that are contrary to the objectives of the organization, including absenteeism, sabotage, and embezzlement. In these cases, they are channelling their persistent efforts in directions that are dysfunctional for the organization. Extrinsic and Intrinsic Motivation
Some hold the view that people are motivated by factors in the external environment (such as supervision or pay), while others believe that people can, in some
sense, be self-motivated without the application of these external factors. You might
have experienced this distinction. As a worker, you might recall tasks that you
enthusiastically performed simply for the sake of doing them and others that you
performed only to keep your job or placate your boss.
Experts in organizational behaviour distinguish between intrinsic and extrinsic
motivation. At the outset, we should emphasize that there is only weak consensus
concerning the exact definitions of these concepts and even weaker agreement about
whether we should label specific motivators as intrinsic or extrinsic.3 However, the
following definitions and examples seem to capture the distinction fairly well.
Intrinsic motivation stems from the direct relationship between the worker and
the task and is usually self-applied. Feelings of achievement, accomplishment, challenge, and competence derived from performing one’s job are examples of intrinsic
motivators, as is sheer interest in the job itself. Off the job, avid participation in
sports and hobbies is often intrinsically motivated.
Extrinsic motivation stems from the work environment external to the task and
is usually applied by someone other than the person being motivated. Pay, fringe
benefits, company policies, and various forms of supervision are examples of
extrinsic motivators. Intrinsic motivation. Motivation
that stems from the direct relationship between the worker and
the task; it is usually self-applied. Extrinsic motivation.
Motivation that stems from the
work environment external to the
task; it is usually applied by
others. 136 Individual Behaviour Part Two Obviously, employers cannot package all conceivable motivators as neatly as
these definitions suggest. For example, a promotion or a compliment might be
applied by the boss but might also be a clear signal of achievement and competence.
Thus, some potential motivators have both extrinsic and intrinsic qualities.
Despite the fact that the distinction between intrinsic and extrinsic motivation is
fuzzy, many theories of motivation implicitly make the distinction. However, the
relationship between intrinsic and extrinsic motivators has been the subject of a
great deal of debate.4 Some research studies have reached the conclusion that the
availability of extrinsic motivators can reduce the intrinsic motivation stemming
from the task itself.5 The notion is that when extrinsic rewards depend on performance then the motivating potential of intrinsic rewards decreases. Proponents of
this view have suggested that making extrinsic rewards contingent on performance
makes individuals feel less competent and less in control of their own behaviour.
That is, they come to believe that their performance is controlled by the environment and that they perform well only because of the money.6 As a result, their
intrinsic motivation suffers. However, a recent review of research in this area
reached the conclusion that the negative effect of extrinsic rewards on intrinsic motivation occurs only under very limited conditions and they are easily avoidable.7 As
well, in organizational settings in which individuals see extrinsic rewards as symbols
of success and as signals of what to do to achieve future rewards, they increase their
task performance.8 Thus, it is safe to assume that both kinds of rewards are important and compatible in enhancing work motivation. Motivation and Performance
Performance. The extent to
which an organizational member
contributes to achieving the
objectives of the organization. Amount of Effort
Persistence of Effort
Direction of Effort Motivation
Chance Performance Exhibit 5.1
Factors contributing to
individual job performance.
General cognitive ability. A
person’s basic information processing capacities and cognitive
resources. At this point, you might well be saying, “Wait a minute, I know many people who
are ‘highly motivated’ but just don’t seem to perform well. They work long and
hard, but they just don’t measure up.” This is certainly a sensible observation, and
it points to the important distinction between motivation and performance.
Performance can be defined as the extent to which an organizational member contributes to achieving the objectives of the organization.
Some of the factors that contribute to individual performance in organizations
are shown in Exhibit 5.1.9 While motivation clearly contributes to performance, the
relationship is not one-to-one because a number of other factors also influence performance. For example, recall from Chapter 2 that personality traits such as the
“Big Five” and core self-evaluations also predict job performance. You might also
be wondering about the role of intelligence—doesn’t it influence performance? The
answer, of course, is yes—intelligence, or what is also known as mental ability, does
predict performance. Two forms of intelligence that are particularly important are
general cognitive ability and emotional intelligence. Let us consider each before we
General Cognitive Ability. The term cognitive ability is often used to refer to what
most people call intelligence or mental ability. Although there are many different
types of specific cognitive abilities, in organizational behaviour we are most concerned with what is known as general cognitive ability. General cognitive ability is
a term used to refer to a person’s basic information-processing capacities and cognitive resources. It reflects an individual’s overall capacity and efficiency for processing information and it includes a number of cognitive abilities such as verbal,
numerical, spatial, and reasoning abilities that are required to perform mental tasks.
Cognitive ability is usually measured by a number of specific aptitude tests that
measure these abilities.10
Research has found that general cognitive ability predicts learning and training
success as well as job performance in all kinds of jobs and occupations including
those that involve both manual and mental tasks. This should not come as a sur- Chapter 5 137 Theories of Work Motivation prise because many cognitive skills are required to perform most kinds of jobs.
General cognitive ability is an even better predictor of performance for more complex and higher-level jobs that require the use of more cognitive skills and involve
more information processing.11
Thus, both general cognitive ability and motivation are necessary for performance. Research has also found that general cognitive ability and motivation are
required for career success. In a study on the early career success of MBA graduates,
those students with higher general cognitive ability in combination with higher
motivation were more successful in their job search at graduation, obtained higher
salaries and more rapid pay increases, and received more promotions. The results of
this study attest to the importance of both general cognitive ability and motivation
for career success and performance.12
Emotional Intelligence. Although the importance of general cognitive ability
for job performance has been known for many years, researchers have only recently
begun to study emotional intelligence. Emotional intelligence (EI) has to do with an
individual’s ability to understand and manage his or her own and others’ feelings
and emotions. It involves the ability to perceive and express emotion, assimilate
emotion in thought, understand and reason about emotions, and manage emotions
in oneself and others. People with emotional intelligence are able to identify and recognize the meanings of emotions and to manage and regulate their emotions as a
basis for problem solving, reasoning, thinking, and action.13
Peter Salovey and John Mayer, who are credited with first coining the term emotional intelligence, have developed an EI model that consists of four interrelated sets
of skills or branches. The four skills represent sequential steps that form a hierarchy.
The perception of emotion is at the bottom of the hierarchy, followed by (in
ascending order) the integration and assimilation of emotions, the knowledge and
understanding of emotions, and the management and regulation of emotions.
Salovey and Mayer’s EI model is shown in Exhibit 5.2 and described below:14
1. The perception of emotions: This involves the ability to perceive emotions and
to accurately identify emotions in oneself and others. An example of this is the
ability to accurately identify emotions in people’s faces and nonverbal behaviour. This step is the most basic level of EI and is necessary in order to be able
to perform the other steps in the model.
2. The integration and assimilation of emotions: This refers to the ability to use
and assimilate emotions and emotional experiences in order to guide and facilitate one’s thinking and reasoning. As well, new emotions can be generated
during this stage.
3. Knowledge and understanding of emotions: This stage involves being able to
understand emotional information, transitions from one emotion to another,
and linguistic information about emotions.
4. Management of emotions: This involves the ability to manage one’s own and
others’ feelings and emotions as well as emotional relationships. This is the
highest level of EI because it requires one to have mastered the previous stages.
At this stage, an individual is able to regulate, adjust, and change his or her
own as well as others’ emotions to suit the situation. Examples of this include
being able to calm oneself when feeling angry or being able to lower the anxiety of another person.
In order to understand the importance of emotional intelligence for organizational behaviour and each of the four sets of skills, consider an employee who is
confronted by an angry customer. In order to respond effectively, the employee must
first be able to perceive and accurately identify the customer’s emotions. Next, the
employee must be able to use this information in thinking about the most appro- Emotional intelligence. The
ability to understand and manage
one’s own and other’s feelings
and emotions. Management of
Emotions Knowledge and
Emotions Integration and
Emotions Perception of
Emotions Exhibit 5.2
Salovey and Mayer’s model
of emotional intelligence.
Source: Based on Mayer, J. D.,
Caruso, D.R., & Salovey, P. (2000).
Emotional intelligence meets traditional standards for an intelligence.
Intelligence, 27, 267–298; Salovey, P.,
& Mayer, J. D. (1990). Emotional
intelligence. Imagination, Cognition
and Personality, 9, 185–211. 138 Individual Behaviour Part Two priate course of action. The employee must also understand his or her own emotions
(while being yelled at, no less!), know what emotions he or she should be displaying,
and how to change the customer’s emotion. Finally, the employee must manage his
or her emotions and stay calm rather than becoming angry with the customer, and
also change the customer’s angry emotion. Employees who have high EI are more
capable of managing situations like this. They can manage their emotions and stay
calm throughout the confrontation and also calm the customer’s anger. Employees
who lack EI are likely to get angry during this kind of confrontation and, in the
process, to increase the anger of the customer.
As the above example illustrates, EI is important for organizational behaviour.
In fact, research has shown that EI predicts performance in a number of areas,
including work performance and academic performance. One study found that college students’ EI measured at the start of the academic year predicted grade point
average at the end of the year. And while EI has been found to predict job performance in many jobs, it is particularly important in jobs that involve a lot of social
interaction and emotional labour.15
In summary, it is certainly possible for performance to be low even when a
person is highly motivated. In addition to personality and levels of general cognitive
ability and emotional intelligence, poor performance could also be due to a poor
understanding of the task or luck and chance factors that can damage the performance of the most highly motivated individual. Of course, an opposite effect is also
conceivable. An individual with rather marginal motivation might have high general
cognitive ability and/or emotional intelligence, or might understand the task so well
that some compensation occurs—what little effort the individual makes is expended
very efficiently in terms of goal accomplishment. Also, a person with weak motivation might perform well because of some luck or chance factor that boosts performance. Thus, it is no wonder that workers sometimes complain that they receive
lower performance ratings than colleagues who “don’t work as hard.”
In this chapter, we will concentrate on the motivational components of performance, rather than on the other determinants in Exhibit 5.1. However, the moral
here should be clear: We cannot consider motivation in isolation; high motivation
will not result in high performance if employees have low general cognitive ability
and emotional intelligence, do not understand their jobs, or encounter unavoidable
obstacles over which they have no control. Motivational interventions, such as
linking pay-to-performance, simply will not work if employees are deficient in
important skills and abilities.16 Need Theories of Work Motivation
Need theories. Motivation theories that specify the kinds of
needs people have and the conditions under which they will be
motivated to satisfy these needs
in a way that contributes to performance. The first three theories of motivation that we will consider are need theories. These
theories attempt to specify the kinds of needs people have and the conditions under
which they will be motivated to satisfy these needs in a way that contributes to performance. Needs are physiological and psychological wants or desires that individuals can satisfy by acquiring certain incentives or achieving particular goals. It is the
behaviour stimulated by this acquisition process that reveals the motivational character of needs:
NEEDS —➤ BEHAVIOUR —➤ INCENTIVES AND GOALS
Notice that need theories are concerned with what motivates workers (needs and
their associated incentives or goals). They can be contrasted with process theories,
which are concerned with exactly how various factors motivate people. Need and
process theories are complementary rather than contradictory. Thus, a need theory
might contend that money can be an important motivator (what), and a process
theory might explain the actual mechanics by which money motivates (how).17 In
this section, we will examine three prominent need theories of motivation. Chapter 5 Theories of Work Motivation 139 Maslow’s Hierarchy of Needs
Abraham Maslow was a psychologist who, over a number of years, developed and
refined a general theory of human motivation.18 According to Maslow, humans
have five sets of needs that are arranged in a hierarchy, beginning with the most
basic and compelling needs (see the left side of Exhibit 5.3). These needs include:
1. Physiological needs. These include the needs that must be satisfied for the
person to survive, such as food, water, oxygen, and shelter. Organizational factors that might satisfy these needs include the minimum pay necessary for survival and working conditions that promote existence.
2. Safety needs. These include needs for security, stability, freedom from anxiety,
and a structured and ordered environment. Organizational conditions that
might meet these needs include safe working conditions, fair and sensible rules
and regulations, job security, a comfortable work environment, pension and
insurance plans, pay above the minimum needed for survival, and freedom to
3. Belongingness needs. These include needs for social interaction, affection, love,
companionship, and friendship. Organizational factors that might meet these
needs include the opportunity to interact with others on the job, friendly and
supportive supervision, opportunity for teamwork, and opportunity to develop
new social relationships.
4. Esteem needs. These include needs for feelings of adequacy, competence, independence, strength, and confidence, and the appreciation and recognition of
these characteristics by others. Organizational factors that might satisfy these
needs include the opportunity to master tasks leading to feelings of achievement and responsibility. Also, awards, promotions, prestigious job titles, professional recognition, and the like might satisfy these needs when they are felt
to be truly deserved.
5. Self-actualization needs. These needs are the most difficult to define. They
involve the desire to develop one’s true potential as an individual to the fullest
extent and to express one’s skills, talents, and emotions in a manner that is
most personally fulfilling. Maslow suggests that self-actualizing people have
clear perceptions of reality, accept themselves and others, and are independent,
creative, and appreciative of the world around them. Organizational conditions that might provide self-actualization include absorbing jobs with the
potential for creativity and growth as well as a relaxation of structure to
permit self-development and personal progression.
Given the fact that individuals may harbour these needs, in what sense do they
form the basis of a theory of motivation? That is, what exactly is the motivational
Needs Maslow’s Need
ERG Theory Intrinsic
Motivation Growth Self-esteem
Belongingness Relatedness Safety
Motivation Exhibit 5.3
Relationship between Maslow
and Alderfer need theories. 140 Maslow’s hierarchy of needs. A
five-level hierarchical need theory
of motivation that specifies that
the lowest-level unsatisfied need
has the greatest motivating
potential. Individual Behaviour Part Two premise of Maslow’s hierarchy of needs? Put simply, the lowest-level unsatisfied
need category has the greatest motivating potential. Thus, none of the needs is a
“best” motivator; motivation depends on the person’s position in the need hierarchy. According to Maslow, individuals are motivated to satisfy their physiological
needs before they reveal an interest in safety needs, and safety must be satisfied
before social needs become motivational, and so on. When a need is unsatisfied, it
exerts a powerful effect on the individual’s thinking and behaviour, and this is the
sense in which needs are motivational. However, when needs at a particular level of
the hierarchy are satisfied, the individual turns his or her attention to the next higher
level. Notice the clear implication here that a satisfied need is no longer an effective
motivator. Once one has adequate physiological resources and feels safe and secure,
one does not seek more of the factors that met these needs but looks elsewhere for
gratification. According to Maslow, the single exception to this rule involves selfactualization needs. He felt that these were “growth” needs that become stronger as
they are gratified. Alderfer’s ERG Theory
ERG theory. A three-level hierarchical need theory of motivation (existence, relatedness,
growth) that allows for movement
up and down the hierarchy. Clayton Alderfer developed another need-based theory, called ERG theory.19 It
streamlines Maslow’s need classifications and makes some different assumptions
about the relationship between needs and motivation. The name ERG stems from
Alderfer’s compression of Maslow’s five-category need system into three categories—existence, relatedness, and growth needs:
1. Existence needs. These are needs that are satisfied by some material substance
or condition. As such, they correspond closely to Maslow’s physiological needs
and to those safety needs that are satisfied by material conditions rather than
interpersonal relations. These include the need for food, shelter, pay, and safe
2. Relatedness needs. These are needs that are satisfied by open communication
and the exchange of thoughts and feelings with other organizational members.
They correspond fairly closely to Maslow’s belongingness needs and to those
esteem needs that involve feedback from others. However, Alderfer stresses
that relatedness needs are satisfied by open, accurate, honest interaction rather
than by uncritical pleasantness.
3. Growth needs. These are needs that are fulfilled by strong personal involvement in the work setting. They involve the full utilization of one’s skills and
abilities and the creative development of new skills and abilities. Growth needs
correspond to Maslow’s need for self-actualization and the aspects of his
esteem needs that concern achievement and responsibility.
As you can see in Exhibit 5.3, Alderfer’s need classification system does not represent a radical departure from that of Maslow. In addition, Alderfer agrees with
Maslow that as lower-level needs are satisfied, the desire to have higher-level needs
satisfied will increase. Thus, as existence needs are fulfilled, relatedness needs gain
motivational power. Alderfer explains this by arguing that as more “concrete” needs
are satisfied, energy can be directed toward satisfying less concrete needs. Finally,
Alderfer agrees with Maslow that the least concrete needs—growth needs—become
more compelling and more desired as they are fulfilled.
It is, of course, the differences between ERG theory and the need hierarchy that
represent Alderfer’s contribution to the understanding of motivation. First, unlike
the need hierarchy, ERG theory does not assume that a lower-level need must be
gratified before a less concrete need becomes operative. Thus, ERG theory does not
propose a rigid hierarchy of needs, and some individuals, owing to background and
experience, might seek relatedness or growth even though their existence needs are
ungratified. Hence, ERG theory seems to account for a wide variety of individual Chapter 5 Theories of Work Motivation 141 differences in motive structure. Second, ERG theory assumes that if the higher-level
needs are ungratified, individuals will increase their desire for the gratification of
lower-level needs. Notice that this represents a radical departure from Maslow.
According to Maslow, if esteem needs are strong but ungratified, a person will not
revert to an interest in belongingness needs because these have necessarily already
been gratified. (Remember, he argues that satisfied needs are not motivational.)
According to Alderfer, however, the frustration of higher-order needs will lead
workers to regress to a more concrete need category. For example, the software
designer who is unable to establish rewarding social relationships with superiors or
co-workers might increase his interest in fulfilling existence needs, perhaps by
seeking a pay increase. Thus, according to Alderfer, an apparently satisfied need can
act as a motivator by substituting for an unsatisfied need.
Given the preceding description of ERG theory, we can identify its two major
motivational premises as follows: The more lower-level needs are gratified, the more
higher-level need satisfaction is desired; the less higher-level needs are gratified, the
more lower-level need satisfaction is desired. McClelland’s Theory of Needs
Psychologist David McClelland has spent several decades studying the human need
structure and its implications for motivation. According to McClelland’s theory of
needs, needs reflect relatively stable personality characteristics that one acquires
through early life experiences and exposure to selected aspects of one’s society.
Unlike Maslow and Alderfer, McClelland has not been interested in specifying a
hierarchical relationship among needs. Rather, he has been more concerned with the
specific behavioural consequences of needs. In other words, under what conditions
are certain needs likely to result in particular patterns of motivation? The three
needs that McClelland studied most have special relevance for organizational
behaviour—needs for achievement, affiliation, and power.20
Individuals who are high in need for achievement (n Ach) have a strong desire
to perform challenging tasks well. More specifically, they exhibit the following characteristics:
■ ■ ■ McClelland’s theory of needs.
A nonhierarchical need theory of
motivation that outlines the conditions under which certain needs
result in particular patterns of
motivation. Need for achievement. A strong
desire to perform challenging
tasks well. A preference for situations in which personal responsibility can be taken for
outcomes. Those high in n Ach do not prefer situations in which outcomes are
determined by chance because success in such situations does not provide an
experience of achievement.
A tendency to set moderately difficult goals that provide for calculated risks.
Success with easy goals will provide little sense of achievement, while
extremely difficult goals might never be reached. The calculation of successful
risks is stimulating to the high–n Ach person.
A desire for performance feedback. Such feedback permits individuals with
high n Ach to modify their goal attainment strategies to ensure success and signals them when success has been reached.21 People who are high in n Ach are concerned with bettering their own performance or that of others. They are often concerned with innovation and long-term
goal involvement. However, these things are not done to please others or to damage
the interests of others. Rather, they are done because they are intrinsically satisfying.
Thus, n Ach would appear to be an example of a growth or self-actualization need.
People who are high in need for affiliation (n Aff) have a strong desire to establish and maintain friendly, compatible interpersonal relationships. In other words,
they like to like others, and they want others to like them! More specifically, they
have an ability to learn social networking quickly and a tendency to communicate
frequently with others, either face-to-face, by telephone, or by letter. Also, they
prefer to avoid conflict and competition with others, and they sometimes exhibit Need for affiliation. A strong
desire to establish and maintain
friendly, compatible interpersonal
relationships. 142 Need for power. A strong desire
to influence others, making a significant impact or impression. Individual Behaviour Part Two strong conformity to the wishes of their friends. The n Aff motive is obviously an
example of a belongingness or relatedness need.
People who are high in need for power (n Pow) strongly desire to have influence
over others. In other words, they wish to make a significant impact or impression
on them. People who are high in n Pow seek out social settings in which they can
be influential. When in small groups, they act in a “high-profile,” attention-getting
manner. There is some tendency for those who are high in n Pow to advocate risky
positions. Also, some people who are high in n Pow show a strong concern for personal prestige. The need for power is a complex need because power can be used in
a variety of ways, some of which serve the power seeker and some of which serve
other people or the organization. However, n Pow seems to correspond most closely
to Maslow’s self-esteem need.
McClelland predicts that people will be motivated to seek out and perform well
in jobs that match their needs. Thus, people with high n Ach should be strongly
motivated by sales jobs or entrepreneurial positions, such as running a small business. Such jobs offer the feedback, personal responsibility, and opportunity to set
goals, as noted above. People who are high in n Aff will be motivated by jobs such
as social work or customer relations because these jobs have as a primary task establishing good relations with others. Finally, high n Pow will result in high motivation
in jobs that enable one to have a strong impact on others—jobs such as journalism
and management. In fact, McClelland has found that the most effective managers
have a low need for affiliation, a high need for power, and the ability to direct power
toward organizational goals.22 (We will study this further in Chapter 12.) Research Support for Need Theories
Measuring peoples’ needs and the extent to which they have these needs fulfilled has
proven to be a difficult task. Thus, the need theories are not especially easy to test.
Nevertheless, we can draw some conclusions about their usefulness.
Maslow’s need hierarchy suggests two main hypotheses. First, specific needs
should cluster into the five main need categories that Maslow proposes. Second, as
the needs in a given category are satisfied, they should become less important, while
the needs in the adjacent higher-need category should become more important. This
second hypothesis captures the progressive, hierarchical aspect of the theory. In general, research support for both these hypotheses is weak or negative. This is probably a function of the rigidity of the theory, which suggests that most people
experience the same needs in the same hierarchical order. However, in this research,
there is fair support for a simpler two-level need hierarchy comprising the needs
toward the top and the bottom of Maslow’s hierarchy.23
This latter finding provides some indirect encouragement for the compressed
need hierarchy found in Alderfer’s ERG theory. Several tests indicate fairly good
support for many of the predictions generated by the theory, including expected
changes in need strength. Particularly interesting is the confirmation that the frustration of relatedness needs increases the strength of existence needs.24 The simplicity and flexibility of ERG theory seem to capture the human need structure
better than the greater complexity and rigidity of Maslow’s theory.
McClelland’s need theory has generated a wealth of predictions about many
aspects of human motivation. Recently, researchers have tested more and more of
these predictions in organizational settings, and the results are generally supportive
of the idea that particular needs are motivational when the work setting permits the
satisfaction of these needs.25 Managerial Implications of Need Theories
The need theories have some important things to say about managerial attempts to
motivate employees. Chapter 5 Theories of Work Motivation 143 Appreciate Diversity. The lack of support for the fairly rigid need hierarchy
suggests that managers must be adept at evaluating the needs of individual
employees and offering incentives or goals that correspond to their own needs.
Unfounded stereotypes about the needs of the “typical” employee and naive
assumptions about the universality of need satisfaction are bound to reduce the
effectiveness of chosen motivational strategies. The best salesperson might not make
the best sales manager! The needs of a young recent college graduate probably differ
from those of an older employee preparing for retirement. One of the most important aspects of Starbucks work–life benefits program is that it surveys employees to
find out what their needs are and then offers programs that meet those needs.
Appreciate Intrinsic Motivation.
The need theories also serve the valuable
function of alerting managers to the existence of higher-order needs (whatever specific label we apply to them). The recognition of these needs in many employees is
important for two key reasons. One of the basic conditions for organizational survival is the expression of some creative and innovative behaviour on the part of
members. Such behaviour seems most likely to occur during the pursuit of higherorder need fulfillment, and ignorance of this factor can cause the demotivation of
the people who have the most to offer the organization. Second, observation and
research evidence support Alderfer’s idea that the frustration of higher-order needs
prompts demands for greater satisfaction of lower-order needs. This can lead to a
vicious motivational circle—that is, because the factors that gratify lower-level
needs are fairly easy to administer (e.g., pay and fringe benefits), management has
grown to rely on them to motivate employees. In turn, some employees, deprived of
higher-order need gratification, come to expect more and more of these extrinsic
factors in exchange for their services. Thus, a circle of deprivation, regression, and
temporary gratification continues at great cost to the organization.26
How can organizations benefit from the intrinsic motivation that is inherent in
strong higher-order needs? First, such needs will fail to develop for most employees
unless lower-level needs are reasonably well gratified.27 Thus, very poor pay, job
insecurity, and unsafe working conditions will preoccupy most workers at the
expense of higher-order outcomes. Second, if basic needs are met, jobs can be
“enriched” to be more stimulating and challenging and to provide feelings of
responsibility and achievement. Finally, organizations could pay more attention to
designing career paths that enable interested workers to progress through a series of
jobs that continue to challenge their higher-order needs. Individual managers could
also assign tasks to employees with this goal in mind. Process Theories of Work Motivation
In contrast to need theories of motivation, which concentrate on what motivates
people, process theories concentrate on how motivation occurs. In this section, we
will examine three important process theories—expectancy theory, equity theory,
and goal setting theory. Process theories. Motivation
theories that specify the details
of how motivation occurs. Expectancy Theory
The basic idea underlying expectancy theory is the belief that motivation is determined by the outcomes that people expect to occur as a result of their actions on the
job. Psychologist Victor Vroom is usually credited with developing the first complete
version of expectancy theory and applying it to the work setting.28 The basic components of Vroom’s theory are shown in Exhibit 5.4:
■ Outcomes are the consequences that may follow certain work behaviours.
First-level outcomes are of particular interest to the organization; for example, Expectancy theory. A process
theory that states that motivation
is determined by the outcomes
that people expect to occur as a
result of their actions on the job.
Outcomes. Consequences that
follow work behaviour. 144 Individual Behaviour Instrumentality. The probability
that a particular first-level outcome will be followed by a particular second-level outcome. ■ Valence. The expected value of
work outcomes; the extent to
which they are attractive or unattractive. ■ Part Two high productivity versus average productivity, illustrated in Exhibit 5.4, or
good attendance versus poor attendance. Expectancy theory is concerned with
specifying how an employee might attempt to choose one first-level outcome
instead of another. Second-level outcomes are consequences that follow the
attainment of a particular first-level outcome. Contrasted with first-level outcomes, second-level outcomes are most personally relevant to the individual
worker and might involve amount of pay, sense of accomplishment, acceptance
by peers, fatigue, and so on.
Instrumentality is the probability that a particular first-level outcome (such as
high productivity) will be followed by a particular second-level outcome (such
as pay). For example, a bank teller might figure that the odds are 50 – 50
(instrumentality =.5) that a good performance rating will result in a pay raise.
Valence is the expected value of outcomes, the extent to which they are attractive or unattractive to the individual. Thus, good pay, peer acceptance, the
chance of being fired, or any other second-level outcome might be more or less
attractive to particular workers. According to Vroom, the valence of first-level
outcomes is the sum of products of the associated second-level outcomes and
their instrumentalities—that is,
the valence of a particular
= Σ instrumentalities × second-level valences.
first-level outcome Expectancy. The probability
that a particular first-level outcome can be achieved. ■ Force. The effort directed toward
a first-level outcome. ■ In other words, the valence of a first-level outcome depends on the extent to
which it leads to favourable second-level outcomes.
Expectancy is the probability that the worker can actually achieve a particular
first-level outcome. For example, a machinist might be absolutely certain
(expectancy = 1.0) that she can perform at an average level (producing 15
units a day) but less certain (expectancy =.6) that she can perform at a high
level (producing 20 units a day).
Force is the end product of the other components of the theory. It represents
the relative degree of effort that will be directed toward various first-level outcomes. According to Vroom, the force directed toward a first-level outcome is
a product of the valence of that outcome and the expectancy that it can be
force = first-level valence × expectancy.
We can expect an individual’s effort to be directed toward the first-level outcome that has the largest force product. Notice that no matter how valent a
particular first-level outcome might be, a person will not be motivated to
achieve it if the expectancy of accomplishment approaches zero. Believe it or not, the mechanics of expectancy theory can be distilled into a
couple of simple sentences! In fact, these sentences nicely capture the premises of the
theory: People will be motivated to perform in those work activities that they find
attractive and that they feel they can accomplish. The attractiveness of various work
activities depends on the extent to which they lead to favourable personal consequences.
It is extremely important to understand that expectancy theory is based on the
perceptions of the individual worker. Thus, expectancies, valences, instrumentalities, and relevant second-level outcomes depend on the perceptual system of the
person whose motivation we are analyzing. For example, two employees performing
the same job might attach different valences to money, differ in their perceptions of
the instrumentality of performance for obtaining high pay, and differ in their expectations of being able to perform at a high level. Therefore, they would likely exhibit
different patterns of motivation. Chapter 5 Theories of Work Motivation First-Level
V I I
V I Peer
V E I I
V I I Peer
V Although expectancy theory does not concern itself directly with the distinction
between extrinsic and intrinsic motivators, it can handle any form of second-level
outcome that has relevance for the person in question. Thus, some people might find
second-level outcomes of an intrinsic nature, such as feeling good about performing
a task well, positively valent. Others might find extrinsic outcomes, such as high
pay, positively valent.
To firm up your understanding of expectancy theory, consider Tony Angelas, a
middle manager in a firm that operates a chain of retail stores (Exhibit 5.5). Secondlevel outcomes that are relevant to him include the opportunity to obtain a raise and
the chance to receive a promotion. The promotion is more highly valent to Tony
than the raise (7 versus 5 on a scale of 10) because the promotion means more
money and increased prestige. Tony figures that if he can perform at a very high
level in the next few months, the odds are six in ten that he will receive a raise. Thus,
the instrumentality of high performance for obtaining a raise is .6. Promotions
are harder to come by, and Tony figures the odds at .3 if he performs well. The 145 Exhibit 5.4
A hypothetical expectancy
model (E = Expectancy,
I = Instrumentality,
V = Valence). 146 Individual Behaviour Part Two instrumentality of average performance for achieving these favourable second-level
outcomes is a good bit lower (.2 for the raise and only .1 for the promotion). Recall
that the valence of a first-level outcome is the sum of the products of second-level
outcomes and their instrumentalities. Thus, the valence of high performance for
Tony is (5 × .6) + (7 × .3) = 5.1. Similarly, the valence of average performance is
(5 × .2) + (7 × .1) = 1.7. We can conclude that high performance is more valent for
Tony than average performance.
Does this mean that Tony will necessarily try to perform at a high level in the
next few months? To determine this, we must take into account his expectancy that
he can actually achieve the competing first-level outcomes. As shown in Exhibit 5.5,
Tony is absolutely certain that he can perform at an average level (expectancy = 1.0)
but much less certain (.3) that he can sustain high performance. Force is a product
of these expectancies and the valence of their respective first-level outcomes. Thus,
the force associated with high performance is .3 × 5.1 = 1.53, while that associated
with average performance is 1.0 × 1.7 = 1.70. As a result, although high performance is attractive to Tony, he will probably perform at an average level.
With all this complicated figuring, you might be thinking “Look, would Tony
really do all this calculation to decide his motivational strategy? Do people actually
think this way?” The answer to these questions is probably no. Rather, the argument
is that people implicitly take expectancy, valence, and instrumentality into account as
they go about their daily business of being motivated. If you reflect for a moment on
your behaviour at work or school, you will realize that you have certain expectancies about what you can accomplish, the chances that these accomplishments will
lead to certain other outcomes, and the value of these outcomes for you. Exhibit 5.5
Expectancy model for Tony
Angelas (E = Expectancy,
I = Instrumentality,
V = Valence). I= .6 Pay
Performance I= E = .3 .3 Promotion
E = 1.
0 I= .2 Pay
Performance I= .1
V=7 Chapter 5 Theories of Work Motivation Research Support for Expectancy Theory
Tests have provided moderately favourable support for expectancy theory.29 In particular, there is especially good evidence that the valence of first-level outcomes
depends on the extent to which they lead to favourable second-level consequences.
We must recognize, however, that the sheer complexity of expectancy theory makes
it difficult to test. We have already suggested that people are not used to thinking in
expectancy terminology. Thus, some research studies show that individuals have a
difficult time discriminating between instrumentalities and second-level valences.
Despite this and other technical problems, experts in motivation generally accept
expectancy theory. Managerial Implications of Expectancy Theory
The motivational practices suggested by expectancy theory involve “juggling the
numbers” that individuals attach to expectancies, instrumentalities, and valences.
Boost Expectancies. One of the most basic things managers can do is ensure
that their employees expect to be able to achieve first-level outcomes that are of
interest to the organization. No matter how positively valent high productivity or
good attendance might be, the force equation suggests that workers will not pursue
these goals if expectancy is low. Low expectancies can take many forms, but a few
examples will suffice to make the point.
■ ■ ■ Employees might feel that poor equipment, poor tools, or lazy co-workers
impede their work progress.
Employees might not understand what the organization considers to be good
performance or see how they can achieve it.
If performance is evaluated by a subjective supervisory rating, employees might
see the process as capricious and arbitrary, not understanding how to obtain a
good rating. Although the specific solutions to these problems vary, expectancies can usually
be enhanced by providing proper equipment and training, demonstrating correct
work procedures, carefully explaining how performance is evaluated, and listening
to employee performance problems. The point of all this is to clarify the path to beneficial first-level outcomes. At Starbucks, employees receive extensive training about
coffee and how to meet, greet, and serve customers that should result in high
expectancies in areas such as product quality and customer service.30
Clarify Reward Contingencies. Managers should also attempt to ensure that
the paths between first- and second-level outcomes are clear. Employees should be
convinced that first-level outcomes desired by the organization are clearly instrumental in obtaining positive second-level outcomes and avoiding negative outcomes.
If a manager has a policy of recommending good performers for promotion, she
should spell out this policy. Similarly, if managers desire regular attendance, they
should clarify the consequences of good and poor attendance. To ensure that instrumentalities are strongly established, they should be clearly stated and then acted on
by the manager. Managers should also attempt to provide stimulating, challenging
tasks for workers who appear to be interested in such work. On such tasks, the
instrumentality of good performance for feelings of achievement, accomplishment,
and competence is almost necessarily high. The ready availability of intrinsic motivation reduces the need for the manager to constantly monitor and clarify instrumentalities.31 147 148 Individual Behaviour Part Two Appreciate Diverse Needs. Obviously, it might be difficult for managers to
change the valences that employees attach to second-level outcomes. Individual
preferences for high pay, promotion, interesting work, and so on are the product of
a long history of development and are unlikely to change rapidly. However, managers would do well to analyze the diverse preferences of particular employees and
attempt to design individualized “motivational packages” to meet their needs. Of
course, all concerned must perceive such packages to be fair. Let us examine another
process theory that is concerned specifically with the motivational consequences of
fairness. Equity Theory
Equity theory. A process theory
that states that motivation stems
from a comparison of the inputs
one invests in a job and the outcomes one receives in comparison with the inputs and
outcomes of another person or
group. In Chapter 4, we discussed the role of equity theory in explaining job satisfaction.
To review, the theory asserts that workers compare the inputs that they invest in
their jobs and the outcomes that they receive against the inputs and outcomes of
some other relevant person or group. When these ratios are equal, the worker
should feel that a fair and equitable exchange exists with the employing organization. Such fair exchange contributes to job satisfaction. When the ratios are
unequal, workers perceive inequity, and they should experience job dissatisfaction,
at least if the exchange puts the worker at a disadvantage vis-à-vis others.
But in what sense is equity theory a theory of motivation? Put simply, individuals are motivated to maintain an equitable exchange relationship. Inequity is
unpleasant and tension producing, and people will devote considerable energy to
reducing inequity and achieving equity. What tactics can do this? Psychologist J.
Stacey Adams has suggested the following possibilities:
■ Perceptually distort one’s own inputs or outcomes.
Perceptually distort the inputs or outcomes of the comparison person or of the
Choose another comparison person or group.
Alter one’s inputs or alter one’s outcomes.
Leave the exchange relationship.32 Notice that the first three tactics for reducing inequity are essentially psychological, while the last two involve overt behaviour.
To clarify the motivational implications of equity theory, consider Terry, a
middle manager in a consumer products company. He has five years’ work experience and an M.B.A. degree and considers himself a good performer. His salary is
$75,000 a year. Terry finds out that Maxine, a co-worker with whom he identifies
closely, makes the same salary he does. However, she has only a Bachelor’s degree
and one year of experience, and he sees her performance as average rather than
good. Thus, from Terry’s perspective, the following outcome/input ratios exist:
Good performance, MBA, 5 years
Average performance, Bachelor’s, 1 year
In Terry’s view, he is underpaid and should be experiencing inequity. What might
he do to resolve this inequity? Psychologically, he might distort the outcomes that
he is receiving, rationalizing that he is due for a certain promotion that will bring
his pay into line with his inputs. Behaviourally, he might try to increase his outcomes
(by seeking an immediate raise) or reduce his inputs. Input reduction could include
a decrease in work effort or perhaps excessive absenteeism. Finally, Terry might
resign from the organization to take what he perceives to be a more equitable job
Let us reverse the coin and assume that Maxine views the exchange relationship
identically to Terry—same inputs, same outcomes. Notice that she too should be Chapter 5 Theories of Work Motivation experiencing inequity, this time from relative overpayment. It does not take a genius
to understand that Maxine would be unlikely to seek equity by marching into the
boss’s office and demanding a pay cut. However, she might well attempt to increase
her inputs by working harder or enrolling in an M.B.A. program. Alternatively, she
might distort her view of Terry’s performance to make it seem closer to her own. As
this example implies, equity theory is somewhat vague about just when individuals
will employ various inequity reduction strategies.
Gender and Equity. As an addendum to the previous example, it is extremely
interesting to learn that both women and men have some tendency to choose samesex comparison persons—that is, when judging the fairness of the outcomes that
they receive, men tend to compare themselves with other men, and women tend to
compare themselves with other women. This might provide a partial explanation for
why women are paid less than men, even for the same job. If women restrict their
equity comparisons to (lesser paid) women, they are less likely to be motivated to
correct what we observers see as wage inequities.33
Research Support for Equity Theory. Most research on equity theory has been
restricted to economic outcomes and has concentrated on the alteration of inputs
and outcomes as a means of reducing inequity. In general, this research is very supportive of the theory when inequity occurs because of underpayment.34 For
example, when workers are underpaid on an hourly basis, they tend to lower their
inputs by producing less work. This brings inputs in line with (low) outcomes. Also,
when workers are underpaid on a piece-rate basis (e.g., paid $1 for each market
research interview conducted), they tend to produce a high volume of low-quality
work. This enables them to raise their outcomes to achieve equity. Finally, there is
also evidence that underpayment inequity leads to resignation. Presumably, some
underpaid workers thus seek equity in another organizational setting.
The theory’s predictions regarding overpayment inequity have received less support.35 The theory suggests that such inequity can be reduced behaviourally by
increasing inputs or by reducing one’s outcomes. The weak support for these strategies suggests either that people tolerate overpayment more than underpayment, or
that they use perceptual distortion to reduce overpayment inequity.
Managerial Implications of Equity Theory. The most straightforward implication of equity theory is that perceived underpayment will have a variety of negative motivational consequences for the organization, including low productivity, low
quality, theft, and/or turnover. (See “Ethical Focus: Inequity and Employee Theft.”)
On the other hand, attempting to solve organizational problems through overpayment (disguised bribery) might not have the intended motivational effect. The trick
here is to strike an equitable balance.
But how can such a balance be struck? Managers must understand that feelings
about equity stem from a perceptual social comparison process in which the worker
“controls the equation”—that is, employees decide what are considered relevant
inputs, outcomes, and comparison persons, and management must be sensitive to
these decisions. For example, offering the outcome of more interesting work might
not redress inequity if better pay is considered a more relevant outcome. Similarly,
basing pay only on performance might not be perceived as equitable if employees
consider seniority an important job input.
Understanding the role of comparison people is especially crucial.36 Even if the
best engineer in the design department earns $2,000 more than anyone else in the
department, she might still have feelings of inequity if she compares her salary with
that of more prosperous colleagues in other companies. Awareness of the comparison people chosen by workers might suggest strategies for reducing felt inequity.
Perhaps the company will have to pay even more to retain its star engineer. Equity 149 150 Individual Behaviour Part Two Inequity and Employee Theft In a survey conducted by the London House publishing firm and the Food Marketing Institute, supermarket employees admitted that they stole an
average of $168 worth of merchandise a year. This
figure was substantially higher than in previous
years’ surveys. The most popular products were
meat, cheese, cigarettes, and beauty and health-care
items. Some of this theft is probably due to feelings
of exploitation in employees. Equity theory predicts
that underpayment inequity can be resolved by
increasing one’s outcomes. Theft could be an
informal mechanism for doing this. As one survey
respondent noted, “During the last couple of years,
the company has kept raising the standards and cutting back on the hours allotted to keeping those
standards up. If you don’t work off the clock, the job
won’t get done. Some people steal as a way to get
even.” Food Marketing Institute
www.fmi.org Psychologist Jerald Greenberg studied employee
theft in manufacturing plants before, during, and
after the imposition of a temporary 10-week pay cut
that was necessitated by a loss of orders. In line with
equity theory predictions, he found that theft
increased greatly during the rollback and then
returned to previous levels once normal pay levels
were reinstituted. Greenberg also found that the
increase in theft was less pronounced in a plant
where management provided an honest and caring
explanation for the pay cuts. Perceptions that management was trying to act ethically despite the need
for the cuts reduced feelings of inequity.
Sources: Greenberg, J. (1990). Employee theft as a reaction to
underpayment inequity: The hidden cost of pay cuts. Journal of
Applied Psychology, 75, 561–568; London House/Food Marketing
Institute. (1992). Third annual report on employee theft in the
supermarket industry. Rosemont, IL: London House. is achieved at Starbucks by treating all employees as partners who are equal participants in the company’s “bean stock” and work–life programs. Goal Setting Theory Goal setting. A motivational
technique that uses specific, challenging, and acceptable goals and
provides feedback to enhance
performance. One of the basic characteristics of all organizations is that they have goals. A goal
is the object or aim of an action.37 At the beginning of this chapter, individual performance was defined as the extent to which a member contributes to the attainment of these goals or objectives. Thus, if employees are to achieve acceptable
performance, some method of translating organizational goals into individual goals
must be implemented.
Unfortunately, there is ample reason to believe that personal performance goals
are vague or nonexistent for many organizational members. Employees frequently
report that their role in the organization is unclear, or that they do not really know
what their boss expects of them. Even in cases in which performance goals would
seem to be obvious because of the nature of the task (e.g., filling packing crates to
the maximum to avoid excessive freight charges), employees might be ignorant of
their current performance. This suggests that the implicit performance goals simply
are not making an impression.
The notion of goal setting as a motivator has been around for a long time.
However, theoretical developments and some very practical research has demonstrated when and how goal setting can be effective.38 What Kinds of Goals Are Motivational?
A large body of evidence suggests that goals are most motivational when they are
specific, challenging, and when organizational members are committed to them. In
addition, feedback about progress toward goal attainment should be provided.39
Goal Specificity. Specific goals are goals that specify an exact level of achievement for people to accomplish in a particular time frame. For example, “I will enroll Chapter 5 Theories of Work Motivation in five courses next semester and achieve a B or better in each course” is a specific
goal. Similarly, “I will increase my net sales by 20 percent in the coming business
quarter” is a specific goal. On the other hand, “I will do my best” is not a specific
goal, since level of achievement and time frame are both vague.
Goal Challenge. Obviously, specific goals that are especially easy to achieve will
not motivate effective performance. However, goal challenge is a much more personal matter than goal specificity, since it depends on the experience and basic skills
of the organizational member. One thing is certain, however—when goals become
so difficult that they are perceived as impossible to achieve, they will lose their
potential to motivate. Thus, goal challenge is best when it is pegged to the competence of individual workers and increased as the particular task is mastered. One
practical way to do this is to base initial goals on past performance. For example,
an academic counsellor might encourage a D student to set a goal of achieving Cs
in the coming semester and encourage a C student to set a goal of achieving Bs.
Similarly, a sales manager might ask a new salesperson to try to increase his sales by
5 percent in the next quarter and ask an experienced salesperson to try to increase
her sales by 10 percent.
Goal Commitment. Individuals must be committed to specific, challenging goals
if the goals are to have effective motivational properties. The effect of goals on performance is strongest when individuals have high goal commitment. In a sense,
goals really are not goals and cannot improve performance unless an individual
accepts them and is committed to working towards them. This is especially important when goals are challenging and difficult to achieve. In a following section, we
will discuss some factors that affect goal commitment.
Goal Feedback. Specific and challenging goals have the most beneficial effect
when they are accompanied by ongoing feedback that enables the person to compare current performance with the goal. This is why a schedule of tasks to be completed often motivates goal accomplishment. Progress against the schedule provides
feedback. To be most effective, feedback should be accurate, specific, credible, and
timely. Enhancing Goal Commitment
It has probably not escaped you that the requirements for goal challenge and goal
commitment seem potentially incompatible. After all, you might be quite amenable
to accepting an easy goal but balk at accepting a tough one. Therefore, it is important to consider some of the factors that might affect commitment to challenging,
specific goals, including participation, rewards, and management support.
Participation. It seems reasonable that organizational members should be more
committed to goals that are set with their participation than to those simply handed
down by their superior. Sensible as this sounds, the research evidence on the effects
of participation is very mixed—sometimes participation in goal setting increases
performance, and sometimes it does not.40 If goal commitment is a potential
problem, participation might prove beneficial.41 When a climate of distrust between
superiors and employees exists, or when participation provides information that
assists in the establishment of fair, realistic goals, then it should facilitate performance. On the other hand, when employees trust their boss, and when the boss has
a good understanding of the capability of the employees, participation might be
quite unnecessary for goal commitment.42 Interestingly, research shows that participation can improve performance by increasing the difficulty of the goals that
employees adopt.43 This might occur because participation induces competition or 151 152 Individual Behaviour Part Two a feeling of team spirit among members of the work unit, which leads them to
exceed the goal expectations of the supervisor.
Rewards. Will the promise of extrinsic rewards (such as money) for goal accomplishment increase goal commitment? Probably, but there is plenty of evidence that
goal setting has led to performance increases without the introduction of monetary
incentives for goal accomplishment. One reason for this might be that many ambitious goals involve no more than doing the job as it was designed to be done in the
first place. For example, encouraging employees to pack crates or load trucks to
within 5 percent of their maximum capacity does not really involve a greater expenditure of effort or more work. It simply requires more attention to detail. Goal setting should, however, be compatible with any system to tie pay to performance that
already exists for the job in question.
Supportiveness. There is considerable agreement about one factor that will
reduce commitment to specific, challenging performance goals. When supervisors
behave in a coercive manner to encourage goal accomplishment, they can badly
damage employee goal commitment. For goal setting to work properly, supervisors
must demonstrate a desire to assist employees in goal accomplishment and behave
supportively if failure occurs, even adjusting the goal downward if it proves to be
unrealistically high. Threat and punishment in response to failure will be extremely
counterproductive.44 Goal Orientation Learning goals. Processoriented goals that focus on
learning and enhance understanding of a task and the use of
Performance goals. Outcomeoriented goals that focus attention on the achievement of
specific performance outcomes. A recent development in goal setting theory has been research on different types of
goals or what is known as goal orientation. Two goal orientations that are particularly important are a learning goal orientation and a performance goal orientation.
Learning goals are process-oriented goals that focus on learning. They enhance
understanding of a task and the use of task strategies. Performance goals are outcome-oriented goals that focus attention on the achievement of specific performance
Individuals appear to differ in their goal preference and goal orientation. In fact,
goal orientation has been found to be a stable individual difference. Some individuals have a preference for learning goals while others have a preference for performance goals. Individuals with a learning goal orientation are most concerned about
learning something new and developing their competence in an activity by acquiring
new skills and mastering new situations. Individuals with a performance goal orientation are most concerned about demonstrating their competence in performing a
task by seeking favourable judgments and avoiding negative judgments.46
Goal orientation is important because it can influence performance as well as
cognitive, affective, and motivational processes. In the last several years, research
has found that a learning goal orientation is especially important for performance
and leads to higher performance compared to a performance goal orientation. One
study on the salespeople of a medical supplies distributor found that a learning goal
orientation was positively related to sales performance but a performance goal orientation was not. A learning goal orientation has also been found to be positively
related to effort, self-efficacy, and goal-setting level. Thus, learning goals appear to
be important for motivation, learning, and performance.47 Research Support for and Managerial Implications of Goal
Several decades of research has demonstrated that specific difficult goals lead to
improved performance and productivity on a wide variety of tasks and occupations, Chapter 5 Theories of Work Motivation 153 Drivers at Weyerhaeuser
Company were assigned a
performance goal of loading
their trucks to 94 percent of
legal weight capacity. including servicing drink machines, entering data, selling, teaching, and typing text.
Studies reveal that the positive results of goal setting are not short lived—they persist over a long enough time to have practical value.48 Furthermore, although we
have focused on individual goal setting, the effect of group goal setting on group
performance is similar to the effect of individual goal setting. Group goals result in
superior group performance, especially when groups set specific goals and when the
group members participate in setting the goals.49 It is also worth noting that the positive effects of goals on performance are due to four mechanisms: they direct attention toward goal-relevant activities; they lead to greater effort; they increase and
prolong persistence; and they lead to the discovery and use of task-relevant strategies for goal attainment.50 Exhibit 5.6 shows the mechanisms that explain the
effects of goals on performance.
The managerial implications of goal setting theory are straightforward: Set specific and challenging goals and provide ongoing feedback so that individuals can
compare their performance with the goal. While goals can be motivational in certain circumstances, they obviously have some limitations. For example, the performance impact of goal setting is stronger for simpler jobs than for more complex jobs
such as scientific and engineering work.
In the next chapter, we will discuss a more elaborate application of goal setting
theory, called management by objectives. For now, consider the application of goal
setting theory in “Applied Focus: Goal Setting at Weyerhaeuser Company.” Goals Mechanisms Specific Direction Challenge Effort Goal commitment Persistence Feedback Task strategies Performance Exhibit 5.6
The mechanisms of goal
Source: Locke, E. A., & Latham, G. P.
(2002). Building a practically useful
theory of goal setting and task motivation. American Psychologist, 57,
705–717. 154 Individual Behaviour Part Two Goal Setting at Weyerhaeuser Company Weyerhaeuser Company is a large forest products
firm headquartered in Tacoma, Washington.
Weyerhaeuser faced a problem that commonly crops
up in production operations—the underutilization of
expensive resources. The problem centred on the
truck drivers who hauled logs from the forest to a
company sawmill. The drivers, who also loaded the
trucks, were unionized and were paid on an hourly
basis. Management determined that the trucks were
averaging only about 60 percent of their legal
weight capacity. This extreme underloading was very
undesirable because extra trucks, extra drivers, and
extra diesel fuel were necessary to transport a given
amount of timber.
Management was convinced that it could
improve the situation if the drivers could be motivated to pay more attention to their loading procedures. Because logs differ in diameter and length, a
full load could vary between 60 and 120 logs. Thus,
the drivers had to exercise judgment in the loading
process. Although a scale was available at the
loading point, the drivers did not seem to be making
good use of it. Weyerhaeuser Co.
www.weyerhaeuser.com With the union’s cooperation, the drivers were
assigned a specific, challenging performance goal of
loading their trucks to 94 percent of legal weight
capacity. Before setting this goal, management had
simply asked the drivers to do their best to maximize
The results? Over the first several weeks, load
capacity gradually increased to over 90 percent and
remained at this high level for seven years! In the
first nine months alone, the company accountants
conservatively estimated the savings at $250,000.
These results were achieved without driver participation in setting the goal and without monetary
incentives for goal accomplishment. Drivers evidently found the 94 percent goal motivating in and
of itself; they frequently recorded their weights in
informal competition with other drivers. Sources: Latham, G. P., & Baldes, J. J. (1975). The “practical significance” of Locke’s theory of goal setting. Journal of Applied
Psychology, 60, 122–124; Adapted from Latham, G. P., & Locke, E.
(1979, Autumn). Goal setting—a motivational technique that
works. Organizational Dynamics, 8(2), 68–80. Do Motivation Theories Translate Across
Are the motivation theories that we have been considering in this chapter culture
bound? That is, do they apply only to North America, where they were developed?
The answer to this question is important for North American organizations that
must understand motivational patterns in their international operations. It is also
important to foreign managers, who are often exposed to North American theory
and practice as part of their training and development.
It is safe to assume that most theories that revolve around human needs will
come up against cultural limitations to their generality. For example, both Maslow
and Alderfer suggest that people pass through a social stage (belongingness, relatedness) on their way to a higher-level personal growth or self-actualization stage.
However, as we discussed in Chapter 4, it is well established that there are differences in the extent to which societies value a more collective or a more individualistic approach to life.51 In individualistic societies (e.g., the United States, Canada,
Great Britain, Australia), people tend to value individual initiative, privacy, and
taking care of oneself. In more collective societies (e.g., Mexico, Singapore,
Pakistan), more closely knit social bonds are observed, in which members of one’s
in-group (family, clan, organization) are expected to take care of each other in
exchange for strong loyalty to the in-group.52 This suggests that there might be no
superiority to self-actualization as a motive in more collective cultures. In some
cases, for example, appealing to employee loyalty might prove more motivational
than the opportunity for self-expression because it relates to strong belongingness
needs that stem from cultural values. Also, cultures differ in the extent to which they
value achievement as it is defined in North America, and conceptions of achieve- Chapter 5 155 Theories of Work Motivation ment might be more group oriented in collective cultures than in individualistic
North America. Similarly, the whole concept of intrinsic motivation might be more
relevant to wealthy societies than to the developing societies.
Turning to equity theory, we noted earlier that people should be appropriately
motivated when outcomes received “match” job inputs. Thus, higher producers are
likely to expect superior outcomes compared with lower producers. This is only one
way to allocate rewards, however, and it is one that is most likely to be endorsed in
individualistic cultures. In collective cultures, there is a tendency to favour reward
allocation based on equality rather than equity.53 In other words, everyone should
receive the same outcomes despite individual differences in productivity, and group
solidarity is a dominant motive. Trying to motivate employees with a “fair” reward
system might backfire if your definition of fairness is equity and theirs is equality.
Because of its flexibility, expectancy theory is very effective when applied crossculturally. The theory allows for the possibility that there may be cross-cultural differences in the expectancy that effort will result in high performance. It also allows
for the fact that work outcomes (such as social acceptance versus individual recognition) may have different valences across cultures.54
Finally, setting specific and challenging goals should also be motivational when
applied cross-culturally and, in fact, goal setting has been found to predict, influence, and explain behaviour in numerous countries around the world.55 However,
for goal setting to be effective, careful attention will be required to adjust the goalsetting process in different cultures. For example, individual goals are not likely to
be accepted or motivational in collectivist cultures. Therefore, group rather than
individual goals should be used in collectivist cultures. Power distance is also likely
to be important in the goal-setting process. In cultures where power distance is
large, it would be expected that goals be assigned by superiors. However, in some
small power distance cultures in which power differences are downplayed, participative goal setting would be more appropriate. One limitation to the positive effect
of goal setting might occur in those (mainly Far-Eastern) cultures in which saving
face is important. That is, a specific and challenging goal may not be very motivating if it suggests that failure could occur and if it results in a negative reaction.
This would seem to be especially bad if it were in the context of the less-thanpreferred individual goal setting. Failure in the face of a very specific goal could lead
to loss of face. As well, in the so-called “being-oriented” cultures where people
work only as much as needed in order to live and avoid continuous work, there
tends to be some resistance to goal setting.56
International management expert Nancy Adler has exemplified how cultural
blinders often lead to motivational errors.57 A primary theme running through this
discussion is that appreciating cultural diversity is critical in maximizing motivation.
Now that we have covered the major motivation theories, let us use them to evaluate an actual motivation program. Please consult “You Be the Manager: The New
Incentive Program at Wesco International, Inc.” Putting It All Together: Integrating Theories
of Work Motivation
In this chapter, we have presented several theories of work motivation and
attempted to distinguish between motivation and performance. In Chapter 4, we
discussed the relationship between job performance and job satisfaction. At this
point, it seems appropriate to review just how all these concepts fit together. Exhibit
5.7 presents a model that integrates these relationships.
Each of the theories helps us to understand the motivational process. First, in
order for individuals to obtain rewards, they must achieve designated levels of performance. We know from earlier in this chapter that performance is a function of Cultures differ in how they
define achievement. In collective
societies where group solidarity
is dominant, achievement may
be more group oriented than in
individualistic societies. Wesco International, Inc.
www.wescodist.com 156 Individual Behaviour Manager
You Be the Wesco offers
its employees a
unique mix of
tied to the
lines. Not long ago, Wesco International, Inc., an electricalsupplies distributor based in Pittsburgh, was a
money-losing unit of Westinghouse Electric Corp. Its
staff was demoralized, turnover was high, and the
company was adrift. To repair the damage quickly
and create some forward momentum, a new management team decided to give employees a cut of
the profits and reward them for increasing net
income year over year.
As a starting point, Wesco offered salespeople
whose expenses are paid by the company a 12.5
percent commission on the annual gross profit of
their sales. Salespeople who pay their own expenses
are entitled to 18 percent of the gross profit their
annual sales bring. For salespeople in the 18 percent
category, Wesco also pays bonuses, capped at
$10,000, for exceeding the total profit their sales
generated the previous year. One Wesco salesman
earned a bundle when he landed a multimilliondollar contract with the federal government to provide an electric power generation system for the
U.S. peacekeeping force in Bosnia.
However, the new system also carries its share of
dangers for employees who do not have the drive
needed to keep leaping over profitability hurdles.
Wesco keeps a close eye on sales performance by
grading it on a quarterly basis. Salespeople are paid
a monthly advance of about $2,500 to $3,000
against their commission; those who do not cover Part Two The New Incentive Program at Wesco
International, Inc. their advance at the end of a quarter are fired or
transferred to a less demanding position. But effective salespeople willing to put in the 60 to 70 hours
a week their jobs demand say they are happy at
So far, the numbers have proved the program a
success. In 1993, when the New York investment
bank Clayton, Dubilier & Rice bought Wesco from
Westinghouse for $340 million, the company was
losing money. Wesco showed a slight profit in 1994
and then went firmly into the black in 1995 with a
profit of $25 million. In 1996, boosted by a string of
acquisitions in 1995, Wesco earned a profit of $32.5
million on sales of $2.3 billion. Since 1994, the company has maintained a six-year string of record
annual sales and operating earnings. Today, Wesco
is a publicly traded Fortune 500 holding company
with annual sales over $3 billion.
At the same time, average annual compensation
for the top performers in Wesco’s sales force has
climbed to more than $140,000, from about $70,000
in 1993. Among the company’s 320 branch managers, average annual compensation at the most
profitable branches has climbed to $160,000, from
about $100,000 in 1993. And the turnover rate is 11
percent, the company’s lowest in 15 years and less
than half of what it was before Wesco was sold.
Use the questions below to frame your opinion
about the motivational effectiveness of the new
incentive program. Questions
1. Use expectancy and goal setting theories to evaluate the strengths and weaknesses of the program.
2. How could equity considerations influence
employee receptiveness to the program?
For some commentary on Wesco’s incentive program, see The Manager’s Notebook at the end of
Source: Excerpted from O’Brien, T. L. (1997, April 10). Reaping the
rewards. The Wall Street Journal, p. R9. motivation as well as other factors such as personality, general cognitive ability,
emotional intelligence, understanding of the task, and chance. In terms of motivation, we are concerned with the amount, persistence, and direction of effort.
Therefore, Boxes 1 through 5 in Exhibit 5.7 explain these relationships.
Perceptions of expectancy and instrumentality (expectancy theory) relate to all
three components of motivation (Box 1). In other words, individuals direct their Chapter 5 Expectancy Theory
• Instrumentality Goal Setting Theory
• Specific goal
• Challenging goal 157 Theories of Work Motivation 4
• General cognitive ability
• Emotional intelligence
• Task understanding
• Chance 1 2 Motivation
• Direction 3 5
Performance 6 7
• Equity of intrinsic
and extrinsic rewards Needs and valence
• Intrinsic rewards
• Extrinsic rewards
Job Satisfaction Exhibit 5.7
Integrative model of
motivation theories. effort toward a particular first-level outcome (expectancy) and increase the amount
and persistence of effort to the extent that they believe it will result in second-level
outcomes (instrumentality). Goal setting theory (Box 2) indicates that specific and
challenging goals will have a positive effect on amount, persistence, and direction of
effort. Goal specificity should also strengthen both expectancy and instrumentality
connections. The individual will have a clear picture of a first-level outcome to
which her effort should be directed and greater certainty about the consequences of
achieving this outcome.
Boxes 3 through 5 illustrate that motivation (Box 3) will be translated into good
performance (Box 5) if the worker has the levels of general cognitive ability and
emotional intelligence relevant to the job, and if the worker understands the task
(Box 4). Chance can also help to translate motivation into good performance. If
these conditions are not met, high motivation will not result in good performance.
For example, consider a hospital nurse who exhibits tremendous motivation but
does not know how to use a syringe properly and is confused about her tasks and
responsibilities. Clearly, such an individual will perform poorly in spite of high
motivation. It is at this link between motivation and performance that observers frequently make judgments about the motivation of workers. Thus, the head nurse
might judge the nurse as having “high” but “misdirected” motivation because the
nurse is directing persistent effort in a way that does not help the hospital achieve
its goals. This portion of the model is essentially the same as the relationships in
Second, a particular level of performance (Box 5) will be followed by certain
outcomes. To the extent that performance is followed by outcomes that fulfill individual needs (need theory) and are positively valent second-level outcomes
(expectancy theory), they can be considered rewards for good performance (Box 6).
In general, the connection between performance and the occurrence of intrinsic
rewards should be strong and reliable because such rewards are self-administered.
For example, the nurse who assists several very sick patients back to health is almost
certain to feel a sense of competence and achievement because such feelings stem
directly from the job. On the other hand, the connection between performance and
extrinsic rewards might be much less reliable because the occurrence of such
rewards depends on the actions of management. Thus, the head nurse might or
might not recommend attendance at a nursing conference (an extrinsic fringe benefit) for the good performance.
Third, to the extent that the rewards fulfill individual needs (need theory), then
they will be motivational as depicted by the path from rewards (Box 6) to motivation (Box 3). In addition, the rewards that individuals receive are also the outcomes 158 Individual Behaviour Part Two of the equity theory equation and will be used by individuals to form perceptions of
equity (Box 7). Perceptions of equity also influence motivation (Box 3) and job satisfaction (Box 8). You will recall that this relationship between job outcomes,
equity, and job satisfaction was discussed in Chapter 4. According to equity theory,
individuals in a state of equity have high job satisfaction. Individuals who are in a
state of inequity experience job dissatisfaction. Also recall from Chapter 4 that good
performance leads to job satisfaction if that performance is rewarded, and job satisfaction in turn leads to good performance.
In summary, each theory of motivation helps us to understand a different part of
the motivational process. Understanding how the different theories of motivation
can be integrated brings us to the topic of the next chapter—practical methods of
motivation that apply the theories we have been studying in this chapter. the manager’s The New Incentive Program at Wesco International, Inc. Notebook
Wesco’s new strategy is in tune with new practices
for compensating salespeople. While most companies once tied commissions solely to the amount of
business captured by a salesperson or a branch office,
a growing number are now paying attention to the
bottom line and are compensating their sales force
on the basis of the profitability of new contracts.
Wesco’s incentive program is unusual, in that it builds
a real element of risk into pay—employees could
make more or less commissions on the basis of the
plan they choose, and failure to cover their advances
can mean being fired or transferred.
Let us put the incentive program through a motivation theory audit:
1. In expectancy theory terms, sales and exceeding
one’s total profit from the previous year are firstlevel outcomes. Sales commissions and the bonus
are second-level outcomes. The commission and
bonus are clearly large enough to get employees’
attention (12.5 percent or 18 percent commission
and up to $10,000 bonus), and it should be
highly valent. Also, the instrumentality connection between sales and one’s commission and
bonus is clear and obvious, being spelled out by
a formula. Potential problems centre on the
expectancy that employees would be able to
exceed their previous year’s sales, cover their
advances, and work the required 60 to 70 hours
a week to do so. Outstanding management support would be necessary, as would some sales
training geared toward improving sales. Also, factors beyond the employees’ control, such as
the economy, could adversely affect profit
growth and thus damage expectancy. In goal setting theory terms, the goals of exceeding one’s
sales each year and covering advances are very
specific and probably challenging to most of the
sales force which should prove to be highly motivational.
2. From an equity theory perspective, the outcomes
that employees receive are a direct result of their
inputs. In other words, one’s commission and
bonus are the result of one’s sales. However,
when considering the social comparison component of equity theory, a couple of potential problems could result in perceptions of inequity and
reduced motivation. First, because of the
requirement to leap profitability hurdles and
cover advances, employees may feel that they
are being treated unfairly, compared with how
they were treated under the previous system
which did not penalize them for not covering
their advance or increasing their sales. Second,
because employees who pay their own expenses
receive a higher percent of commission and are
also eligible for a bonus in comparison with
salespersons whose expenses are paid by the
company, there is the potential for some salespersons to earn more money for doing the same
amount of sales. Large differences in compensation between the two plans might lead to some
perceptions of inequity. Chapter 5 Theories of Work Motivation Learning Objectives Checklist
1. Motivation is the extent to which persistent effort is
directed toward a goal. Performance is the extent to
which an organizational member contributes to
achieving the objectives of the organization.
2. Intrinsic motivation stems from the direct relationship between the worker and the task and is usually
self-applied. Extrinsic motivation stems from the
environment surrounding the task and is applied by
3. Performance is influenced by motivation as well as
personality, general cognitive ability, emotional
intelligence, task understanding, and chance factors.
General cognitive ability refers to a person’s basic
information processing capacities and cognitive
resources. Emotional intelligence refers to the ability
to manage emotions in oneself and others.
Motivation will be translated into good performance if an individual has the general cognitive
ability and emotional intelligence relevant to the job,
and if he or she understands the task.
4. Need theories propose that motivation will occur
when employee behaviour can be directed toward
goals or incentives that satisfy personal wants or
desires. The three need theories discussed were
Maslow’s need hierarchy, Alderfer’s ERG theory,
and McClelland’s theory of needs for achievement,
affiliation, and power. Maslow and Alderfer have
concentrated on the hierarchical arrangement of
needs and the distinction between intrinsic and
extrinsic motivation. McClelland has focused on the
conditions under which particular need patterns
stimulate high motivation.
5. Process theories attempt to explain how motivation
occurs rather than what specific factors are motivational. Expectancy theory argues that people will be
motivated to engage in work activities that they find
attractive and that they feel they can accomplish.
The attractiveness of these activities depends on the
extent to which they lead to favourable personal
6. Equity theory states that workers compare the
inputs that they apply to their jobs and the outcomes
that they achieve from their jobs with the inputs and
outcomes of others. When these outcome/input
ratios are unequal, inequity exists, and workers will
be motivated to restore equity. 159 7. Goal setting theory states that goals are motivational when they are specific and challenging, and
when workers are committed to them. In some
cases, companies can facilitate goal commitment
through employee participation in goal setting and
by financial incentives for goal attainment, but
freedom from coercion and punishment seems to be
the key factor in achieving goal commitment. Goals
also can vary in terms of whether they are learning
or performance goals.
8. There are some cross-cultural limitations of the theories of motivation. For example, most theories that
revolve around human needs will come up against
cultural limitations to their generality as a result of
differences in values across cultures. As for equity
theory, trying to motivate employees with a “fair”
reward system might backfire if the definition of
fairness is other than equity (e.g., equality). Because
of its flexibility, expectancy theory is very effective
when applied cross-culturally and allows for the
possibility that there may be cross-cultural differences in the expectancy that effort will result in high
performance. It also allows for the fact that work
outcomes (such as social acceptance versus individual recognition) may have different valences
across cultures. Setting specific and challenging
goals should also be motivational when applied
cross-culturally. However, for goal setting to be
effective, careful attention will be required to adjust
the goal-setting process in different cultures.
9. Performance is a function of motivation as well as
other factors such as personality, general cognitive
ability, emotional intelligence, understanding of the
task, and chance. Perceptions of expectancy and
instrumentality influence motivation as do specific
and challenging goals. Motivation will be translated
into good performance if the worker has the levels
of general cognitive ability and emotional intelligence relevant to the job, and if the worker understands the task. Chance can also help to translate
motivation into good performance. To the extent
that performance leads to rewards that fulfill individual needs and are positively valent, they will be
motivational. When the rewards are perceived as
equitable, they will have a positive effect on motivation and job satisfaction. Furthermore, good performance leads to job satisfaction if that performance is
rewarded, and job satisfaction in turn leads to good
performance. 160 Individual Behaviour Part Two Discussion Questions Integrative Discussion Questions 1. Many millionaires continue to work long, hard
hours, sometimes even beyond the usual age of
retirement. Use the ideas developed in the chapter
to speculate about the reasons for this motivational
pattern. Is the acquisition of wealth still a motivator for these individuals? 1. Refer to the cross-cultural dimensions of values
described in Chapter 4 (i.e., work centrality, power
distance, uncertainty avoidance, masculinity/ feminity, individualism/collectivism, and longterm/short-term orientation) and discuss the
implications of each value for exporting the work
motivation theories across cultures. Based on your
analysis, how useful are the theories described in
this chapter for understanding and managing motivation across cultures? What are the implications? 2. Discuss a time when you were highly motivated to
perform well (at work, at school, in a sports contest) but performed poorly in spite of your high
motivation. How do you know that your motivation was really high? What factors interfered with
good performance? What did you learn from this
3. Use Maslow’s hierarchy of needs and Alderfer’s
ERG theory to explain why assembly line workers
and executive vice-presidents might be susceptible
to different forms of motivation.
4. Colleen is high in need for achievement, Eugene is
high in need for power, and Max is high in need
for affiliation. They are thinking about starting a
business partnership. To maximize the motivation
of each, what business should they go into, and
who should assume which roles or jobs?
5. Reconsider the case of Tony Angelas, which was
used to illustrate expectancy theory. Imagine that
you are Tony’s boss and you think that he can be
motivated to perform at a high level. Suppose you
cannot modify second-level outcomes or their
valences, but you can affect expectancies and
instrumentalities. What would you do to motivate
Tony? Prove that you have succeeded by recalculating the force equations to demonstrate that Tony
will now perform at a high level.
6. Debate the following statements: Of all the motivational theories we discussed in this chapter, goal
setting is the simplest to implement. Goal setting is
no more than doing what a good manager should
be doing anyway. 2. Consider the basic characteristics of motivation in
relation to operant learning and social learning
theory. What are the implications of operant
learning and social learning theory for motivation,
and how do they compare to the theories of work
motivation described in this chapter? Experiential Exercise
The following scale is a self-report measure of emotional intelligence. Answer each of the statements as accurately and honestly as possible using the following response scale:
1–Strongly disagree 4–Agree 2–Disagree 5–Strongly agree 3–Neither agree or disagree
____ 1. I know when to speak about personal problems to
____ 2. When I am faced with obstacles, I remember times I
faced similar obstacles and overcame them.
____ 3. I expect that I will do well on most things I try.
____ 4. Other people find it easy to confide in me.
____ 5. I find it hard to understand the nonverbal messages
of other people. 7. What are the implications of goal orientation for
motivating a group of employees? When would it
be best to set a learning goal versus a performance
goal? ____ 6. Some of the major events of my life have led to me
to re-evaluate what is important and not important. 8. Critique the following assertion: People are basically the same. Thus, the motivation theories discussed in the chapter apply equally around the
globe. ____ 8. Emotions are one of the things that make my life
worth living. ____ 7. When my mood changes, I see new possibilities. ____ 9. I am aware of my emotions as I experience them.
____ 10. I expect good things to happen.
____ 11. I like to share my emotions with others. Chapter 5 Theories of Work Motivation ____ 12. When I experience a positive emotion, I know how
to make it last.
____ 13. I arrange events others enjoy.
____ 14. I seek out activities that make me happy.
____ 15. I am aware of the non-verbal messages I send to
____ 16. I present myself in a way that makes a good
impression on others.
____ 17. When I am in a positive mood, solving problems is
easy for me.
____ 18. By looking at their facial expressions, I recognize
the emotions people are experiencing.
____ 19. I know why my emotions change.
____ 20. When I am in a positive mood, I am able to come
up with new ideas.
____ 21. I have control over my emotions.
____ 22. I easily recognize my emotions as I experience
____ 23. I motivate myself by imagining a good outcome on
tasks I take on.
____ 24. I compliment others when they have done something well.
____ 25. I am aware of the non-verbal messages other people
____ 26. When another person tells me about an important
event in his or her life, I almost feel as though I
have experienced this event myself. 161 Scoring and Interpretation
To obtain your score, first subtract your response to questions
5, 28, and 33 from 6. For example, if you gave a response of
1 to question 5, give yourself a 5 (6 minus 1). Then add up
your scores to all 33 items. Your total should be somewhere
between 33 and 165. The higher your score, the higher your
emotional intelligence. Because this is a self-report measure of
EI, it is susceptible to bias. As a result, your score might differ
somewhat on a more objective measure of EI.
In a study that compared the EI scores of psychotherapists,
prisoners, and substance abuse clients, the EI was highest for
the psychotherapists (134.92), followed by the substance
abuse clients (122.23), and then the prisoners (120.08). As
well, the women in the sample had higher EI scores (130.94)
than the men (124.78). In addition, the EI of college students
who completed this scale was significantly related to grade
point averages at the end of their first year. In other words,
higher EI was associated with a higher grade point average.
Higher scores on this EI scale have also been found to be
related to openness to experience but not to any of the other
dimensions of the Five-Factor Model of Personality.
Source: Schutte, N. S., Malouff, J. M., Hall, L. E., Haggerty, D. J.,
Cooper, J. T., Golden, C. J., & Dornheim, L. (1998). Development
and validation of a measure of emotional intelligence. Personality
and Individual Differences, 25, 167–177. What Are Your Needs?
What are your needs and what will motivate you?
Think about your future career. Think about the ideal job
you would like to have. What matters the most to you? What
matters the least to you? Listed below are three groups of
work-related characteristics. Rank each group separately from
5 for the most important to 1 for the least important. Career
Rank this Group from 5 (Most) to 1 (Least)
_____ 1. My co-workers will be very friendly. ____ 27. When I feel a change in emotions, I tend to come
up with new ideas.
____ 28. When I am faced with a challenge, I give up
because I believe I will fail.
____ 29. I know what other people are feeling just by
looking at them. _____ 2. The company will protect me from harassment by
customers, fellow employees, and supervisors.
_____ 3. The working conditions will protect me from bad
_____ 4. The work will be creative and challenging. ____ 30. I help other people feel better when they are down.
____ 31. I use good moods to help myself keep trying in the
face of obstacles.
____ 32. I can tell how people are feeling by listening to the
tone of their voice.
____ 33. It is difficult for me to understand why people feel
the way they do. _____ 5. My supervisor will recognize the value of my work
and praise me for it.
Rank this Group from 5 (Most) to 1 (Least)
_____ 6. I will be able to participate in decision making.
_____ 7. The company will sponsor social activities both on
and off the job.
_____ 8. The pay and fringe benefits will be good. 162 Individual Behaviour _____ 9. There will be good opportunities for promotion to
a higher status job. Part Two
Rank this Group from 5 (Best) to 1 (Worst)
_____ 11. I get along well with my supervisor. _____ 10. The company will work hard to maintain safe
working conditions. _____ 12. There is a merit pay system based on performance. Rank this Group from 5 (Most) to 1 (Least) _____ 13. The company provides a cafeteria for its employees. _____ 11. I will get along well with my supervisor. _____ 14. The work itself has a flexible schedule and I have a
lot of autonomy. _____ 12. There will be a merit pay system based on performance. _____ 15. There is excellent job security. _____ 13. The company will provide a cafeteria for its
_____ 14. The work itself will have a flexible schedule, and I
will have a lot of autonomy.
_____ 15. There will be excellent job security.
Think about your current job (or if you do not have one
right now, think about the last job you had). What are the best
things about this job? What are the worst things about the
job? Listed below are three groups of characteristics about
jobs. Rank each group separately from 5 for the best thing to
1 for the worst thing. Current Job Scoring and Interpretation
The items in this list represent the five levels of needs found in
Maslow’s hierarchy of needs. Each of the groups of five has an
item which refers to one of Maslow’s needs as applied to the
workplace. Use the number in the left-hand column to sort out
the items. Add the scores together for each level of the hierarchy.
The instrument also differentiates between your needs as
they exist as an ideal and the way in which your current
employer is meeting your needs. These are also scored separately.
Your Career: What Is Your Hierarchy of Needs?
Self-actualization: Add together the ranks for items 4, 6, and 14
(4) + (6) + (14) = Rank this Group from 5 (Best) to 1 (Worst)
_____ 1. My co-workers are very friendly. Self-esteem: Add together the ranks for items 5, 9, and 12 _____ 2. The company protects me from harassment by customers, fellow employees, and supervisors. (5) _____ 3. The working conditions protect me from bad
weather. + (9) + (12) = Belongingness: Add together the ranks for items 1, 7, and 11
(1) + (7) + (11) = Safety: Add together the ranks for items 2, 10, and 15 (2) + _____ 4. The work is creative and challenging.
_____ 5. My supervisor recognizes the value of my work and
praises me for it.
Rank this Group from 5 (Best) to 1 (Worst)
_____ 6. I am able to participate in decision making.
_____ 7. The company sponsors social activities both on and
off the job.
_____ 8. The pay and fringe benefits are good.
_____ 9. There are good opportunities for promotion to a
higher status job. (10) + (15) = Physiological: Add together the ranks for items 3, 8, and 13
(3) + (8) + (13) = Current Job: How Are Your Needs Being Met?
Self-actualization: Add together the ranks for items 4, 6, and 14
(4) + (6) + (14) = Self-esteem: Add together the ranks for items 5, 9, and 12
_____ 10. The company works hard to maintain safe working
conditions. (5) + (9) + (12) = Chapter 5 Theories of Work Motivation Belongingness: Add together the ranks for items 1, 7, and 11
(7) + Safety: Add together the ranks for items 2, 10, and 15 2. Discuss the motivational potential of this program
according to expectancy theory. Will the program motivate the sales staff and improve sales?
(2) + 3. How would you change the program in order to make it
more effective for motivating employees? + (11) (15) = 1. According to need theories of motivation and goal setting
theory, will this program be motivational? (1) (10) + 163 = Physiological: Add together the ranks for items 3, 8, and 13
(3) + (8) + (13) = Lincoln Electric Company TABLE OF RESULTS
Hierarchy of Needs Your Career Case Study Current Job Self-actualization
Analyze your results by comparing your career needs with
those in your current job. 1. What is your strongest need? Is it being met in your
2. What differences exist between your career needs
and your current job?
3. According to Maslow’s need hierarchy theory, what
should your current or future employer do to motivate you?
Source: Hoffman, R. & Ruemper, F. (1997). What matters in a job?
Organizational behavior: Canadian cases and exercises, 3rd ed.
Reprinted with permission of Captus Press Inc., Units 14 & 15,
1600 Steeles Ave. West, Concord, ON L4K 4M5. E-mail:
firstname.lastname@example.org. Internet: http://www.captus.com. Case Incident
Mayfield Department Stores
As competition in the retail market began to heat up, it
became necessary to find ways to motivate the sales staff of
Mayfield Department Stores in order to increase sales.
Therefore, a motivational program was developed with the
help of a consulting firm. Employees were informed that each
month employees in the department with the highest sales
would have a chance to win a trip to Florida. At the end of the
year, the names of all employees in those departments that had
the highest sales for at least one month would have their name
entered into a draw, and then three names would be chosen to
win a one-week trip to Florida paid for by Mayfield. On the surface, the Lincoln Electric Company might look like
a motivational disaster. The firm, located near Cleveland,
Ohio, offers employees no paid sick days and no paid holidays. Lincoln employees have to pay their own health insurance, and overtime work and unexpected job reassignments
are mandatory. If older workers lower their productivity, they
receive less pay. Management does not take seniority into
account in promotions. Lincoln managers receive no executive
“perks”—no cars, no executive dining room, no club memberships, no management seminars, and no reserved parking.
Despite these apparently draconian policies, Lincoln has
become something of a mecca for visiting managers (from
Ford, GM, TRW, 3M, Motorola, and McDonnell Douglas),
who flock to Cleveland to learn something about motivation.
Lincoln is the world’s largest producer of arc welding equipment, and it also makes electric motors. The firm has turned
a handsome profit every quarter for over 50 years and has not
laid anyone off for over 40 years. In 1995, the company celebrated its centennial year by posting record sales of $1.03 billion. Employee turnover is extremely low, and Lincoln
workers are estimated to be roughly twice as productive as
other manufacturing workers. This productivity is an important key to Lincoln’s success because it is not dealing in hightech products, and it does not compete strongly on price.
What is the secret to Lincoln’s motivational success? In a
word, money. Lots of it. In addition to its leadership position
in the manufacture of arc welding equipment, Lincoln Electric
is also known for its innovative incentive system. Lincoln
Electric offers what some say are the best paid factory jobs in
the world. At the core of the system is an intricate piece-rate
pay plan that rewards workers for what they produce and a
merit-based profit-sharing plan that provides a yearly bonus.
This bonus, which can approach 100 percent of regular earnings, is also allocated on merit to managers and staff. Each
employee is regularly evaluated by his or her immediate supervisor on a number of dimensions (e.g., quality and cooperation). The size of the bonus pool is based on the company’s
economic performance. In other words, the more profitable
the company the larger will be the dollar pool from which the
bonuses are paid. The total bonus received by each employee
is based on his or her evaluation. As a result, there is a direct
connection between an employee’s performance and the bonus
paid out to that employee at the end of the year. Employees
who do better than average receive a higher bonus and those 164 Individual Behaviour who do worse than average receive a lower bonus. Year end
bonuses normally range from 60 to 150 percent of regular
salary. The average production worker has earned $45,000 in
recent years, with some earning well over $85,000!
If workers think up a way to increase productivity, the
company does not adjust the piece-rate to cap potential
wages. Also, they cannot work themselves out of a job, since
Lincoln has a no-layoff policy. Effectively, this amounts to lifetime employment. Employees are guaranteed 30 hours a week,
and work is shared instead of laying people off. Employees are
so keen to get working that the company enforces a policy
prohibiting them from coming in too early. The company is
also known for having fewer supervisors per worker than
most organizations, with a ratio of 1:100. Training programs
are frequently available on all aspects of business and factory
life including communication skills, teamwork programs, and
When the company had its first big hiring in years, it
received 27,000 applications. Life at Lincoln, however, is not
for everyone. Some managers would resent the lack of perks.
Some new production workers cannot take the fast pace and
quit shortly after hiring. In fact, out of the 27,000 applications, 2,000 were eventually hired, but over 1,000 left in the
first 90 days. Many never even apply because of Lincoln’s
In recent years, Lincoln Electric has expanded internationally. And although the company’s arc welding equipment is
used in the same way everywhere, this has not been the case
for the company’s motivational system. According to Donald
Hastings, Chairman Emeritus and former CEO, “In many
cases we didn’t truly understand the cultures of those countries we expanded. For example, we had an incentive program
that was based on the belief that everybody in the world
would be willing to work a little harder to enhance their lives
and their families and their incomes. It was an erroneous
assumption. It simply didn’t work in Germany, for example.
Ten years from now, it might, because Germans are changing
their thought patterns, getting away from a completely socialized economy where the quality of life is much more important than the monetary returns. But for now, they don’t really
want to put in the extra time and effort that Americans,
Canadians, and Australians do.” Although Lincoln Electric
still sells their products in Germany, the manufacturing operation has been closed down. Part Two
Sources: Hodgetts, R.M. (1997, Winter). A conversation with
Donald F. Hastings of the Lincoln Electric Company. Organizational
Dynamics, pp. 68–74; 60 Minutes, Lincoln Electric Company, 1993;
Epstein, G. (1989, October). Inspire your team. Success, p. 12;
Perry, N.J. (1988, December 19). Here come richer, riskier pay
plans. Fortune, 50–58; Sharplin, A. D. (1990). Lincoln Electric
Company, 1989. In A. A. Thompson, Jr., & A. J. Strickland, III.
Strategic management: Concepts and cases. Homewood, IL:
BPI/Irwin. 1. Describe the practices that Lincoln Electric uses to motivate employees. What are some of the consequences of
these practices for employees and the company?
2. Discuss the motivational system at Lincoln Electric, using
each of the need theories of motivation. What does each
theory say about the motivational practices at Lincoln
Electric and which theory works best for explaining
3. Consider the motivational system at Lincoln Electric in
terms of the process theories of motivation. What does
each theory say about the company’s motivational practices? In other words, can we understand the system and
its effectiveness in terms of expectancy theory, equity
theory, and goal setting theory?
4. Some have said that the methods of motivation used at
Lincoln Electric should be used by all organizations to
motivate their employees. Do you believe this to be true?
Explain your reasoning.
5. Comment on the cross-cultural limitations of Lincoln
Electric’s motivational system. How do the theories of
work motivation help us to understand why the company’s incentive program did not work in Germany but
does work in North America and Australia? What does
this tell us about the cross-cultural limitations of the theories of motivation?
6. What can other organizations learn about motivation
from Lincoln Electric? What do you recommend that
organizations do to motivate employees based on your
knowledge of the Lincoln Electric motivational system
and on your understanding of motivation? ...
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