Essay on Motivation of Employees

Read this essay to learn about the Motivation of Employees. After reading this essay you will learn about:- 1. Meaning of Motivation 2. Model of Motivation 3. Nature 4. Importance 5. Factors 6. Approaches 7. Theories.

Essay Contents:

1. Essay on the Meaning of Motivation
2. Essay on the Model of Motivation
3. Essay on the Nature of Motivation
4. Essay on the Importance of Motivation
5. Essay on the Factors Affecting Motivation
6. Essay on the Approaches to Motivation
7. Essay on the Theories of Motivation

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1. Essay on the Meaning of Motivation:

The term motivation is derived from the Latin word ‘mover’ which means “to move”. Motivation is the forces acting on or within a person that causes the arrival, direction and persistence of goal directed, voluntary effort.

Motivation process explains why and how human behaviour is activated. Motivation is the ability to change the behaviour of a person. It is a drive that compels a person to act because human behaviour is directed towards some goal.

Motivation is intrinsic (internal), it comes from within based on personal interests and desire for need fulfillment. However, extrinsic (external) factors such as rewards and promotions also influence motivation. As defined by Daft (1997), motivation refers to the forces interior or external to a person that arouse enthusiasm and persistence to pursue a certain course of action.

People committed to organisational objectives generally outperform those who are not committed. Those who are intrinsically rewarded by accomplishments in the work place are satisfied with their jobs. Therefore, an important part of management is to keep work satisfying and reward employees and keep employee motivation consistent with organisational objectives within the diversity of contemporary workplaces.

This is, however, a complex task as many factors including the influences of different cultures, differently affect what people value and what is rewarding to them. From the managers’ perspective, it is important to understand what prompts people, what influences them and why they perform particular actions.

Quick (1985) presented four underlying principles important to understand motivation:

1. People have reasons for everything they do.

2. Whatever people choose as a goal is something, they believe is good for them.

3. The goal people choose must be attainable.

4. The conditions under which the work is done can affect its value to the employee.

When management was first studied in a scientific way during the twentieth century, Frederick Wins low Taylor worked to improve productivity of labour. He developed efficiency measures and incentive system where workers were paid more for meeting a standard higher than normal production. This increased productivity dramatically. Therefore, workers seemed to be economically motivated.

During the late 1920’s and early 1930’s, Elton Mayo and other researchers from Harvard University conducted studies at Western Electric Plant in Hawthorne to measure productivity. They studied the effects of fatigue, layout, heating and lighting on productivity. As management expected, when studying the impact of these factors on employee productivity, it increased because of increase in social factors.

Work force is primarily responsible for achieving the targets. The work force is required to be self starters, highly ambitious, result-oriented and go-getters. All work situations cannot be predicted and planned in view of the dynamic and changing market situations.

Effective working requires creative skills. Thus, the work force has to be kept highly motivated and committed, both externally and internally. Motivation is a complex force because the factors that motivate people are complex and complicated. Financial incentives may be important for some and non-financial incentives may be important for others. The manager must, therefore, determine what motivates the human behaviour.

An individual performs business tasks, in the first instance, not because he wants the organisational goals to be achieved but because that work will give him financial rewards through which he can satisfy his personal needs and desires. The need is, therefore, the driving force that motivates human behaviour.

“Motivation may be defined as the state of individual’s perspective which represents the strength of his or her propensity to exert effort toward some particular behaviour”.

— Gibson

“Motivation refers to expenditure of efforts towards a goal”. — Dubrin

“Motivation is the force that energizes behaviour, gives direction to behaviour and underlies the tendency to persist.” — Steers and Porter

“Motivation is a general term applying to the entire class of drives, desires, needs, wishes and similar forces. To say that managers motivate their subordinates is to say that they do those things which they hope will satisfy these drives and desires and induce the subordinates to act in a desired manner.” — Weihrich and Koontz

Thus, the process of motivation begins when a person has needs to satisfy. He performs actions (behaviour) to fulfill his need.

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2. Essay on the Model of Motivation:

A model of motivation helps managers enforce the right motivators to prompt workers to action; suitable for the organisation to achieve its broader goals. According to the model, every individual has some need (primary or secondary) which he wants to satisfy and, therefore, engages in some behaviour. This behaviour is goal-directed as it aims to fulfill some goal, that is, the need of the individual.

If employees’ behaviour is acceptable to managers (it contributes to goals of the organisation), it is followed by rewards. Rewards satisfy their needs, but the behaviour does not come to an end because satisfaction of one need is followed by emergence of other needs. This reinforces their behaviour towards organisational activities and perpetuates further needs in them. The goal-directed behaviour, thus, becomes a continuous process.

On the contrary, if the behaviour is not suitably rewarded, and employee’s needs remain unsatisfied; he will not reinforce his behaviour towards the organisational activities and may change his action, change his need or look for other job opportunities.

If he continues on the same job, he may lose interest in work and become indifferent towards it. Though physically he may be present at work, mentally he may not be fulfilling the requirements of the job. Sometimes, non-satisfaction of needs leads to aggression also. The employee may act against a person or a thing. He may speak unparliamentarily language in the office or belittle his superiors. Aggression can be internal or external.

In internal aggression, the person finds fault with himself but in external aggression, he finds fault with others. There may also be displaced aggression where the employee vents out his anger on others since he cannot do the same at his superior. He may take up a fight with a colleague or an argument with spouse at home or may just slam the door or kick the objects at floor.

Different motivational theories ascertain the needs and desires of individuals that prompt them to action and satisfy them through various motivators. The needs are, thus, not always the cause of human behaviour they may even be a result of it.

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3. Essay on the Nature of Motivation:

(i) Internal force:

The degree of motivation cannot be measured in quantitative terms. It can only be observed through actions and performance of employees. Motivation is an internal force or feeling of a person.

(ii) Effect of environmental factors:

Internal organisational factors play important role in motivating the employees. Poor working conditions, labour management conflict, autocratic style of management can affect initiative to work however able or willing the employee is to perform the task. Conversely, clean and quiet environment, healthy and cordial relationships encourage workers to contribute to organisational output.

(iii) Ongoing process:

The process of motivation; observing human needs, behaviour and action is continuously followed by managers. Since human needs are multiple and importance of needs keeps changing, managers constantly watch their needs-behaviour-action.

(iv) Pervasive function:

Motivation is required at all levels of management. Both managers and non-managers need to be motivated to accomplish the organisational goals and through them, their personal goals.

(v) Complicated process:

Since understanding, human needs is a difficult task, motivation itself is a complicated or complex task.

(vi) Skilled managers:

Different people satisfy different needs from same work. Same person also has different needs at different points of time.

a. Needs are ever-changing. Sometime, the individual himself is not clear of his need priority. The means for satisfying the needs, thus, becomes all the more complicated.

b. People may look to different motivators to satisfy the same need. For some, money may be a suitable motivator for ego satisfaction while for others it may be non-financial motivators like status or power.

c. Same motivator can satisfy different needs of a person. Financial rewards is a strong motivator to satisfy lower-order needs. However, it can also be desired to partly satisfy the higher-order needs.

Managers have to be skilled in motivating their employees. Unless they understand human needs, right motivators cannot be adopted. Of all the skills that managers have, the skill of motivating employees was greatly emphasised upon in a study conducted on motivation.

(vii) Positive and negative motivation:

Motivation normally means rewarding a person for contributing to organisational output. Negative motivation, that is, punishments and penalties, though not often used, can also be effective in influencing the human behaviour.

(viii) Goal-directed:

Motivation aims at directing behaviour towards organisational goals. Managers have to adopt motivators that direct human behaviour towards personal and organisational need satisfaction.

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4. Essay on the Importance of Motivation:

(i) Keep employees happy:

Usual remuneration given in the form of salary or commission or any other kind is not sufficient, as it is common to all employees. Man is not a machine. He must be satisfied, happy and cheerful. It is normally found that a man is able to do his best when there is encouragement, stimulation, upliftment in the form of money, recognition, promotions, transfers, etc.

If the employees are satisfied, it gives more than what the company wants. Disgruntled, unsatisfied employees are likely to do more harm than good to the business organisation.

(ii) The nature of work:

The nature of job performed by employees also warrants the need for stimulation. Employees face a chain of incidents everyday, both happy and unhappy. The clients they meet are happy or unhappy, nice and courteous; some are rude, indifferent and curt. Some bring in orders; some only complaint and argue. Employees are regularly under mental tension, caused by the resistance of clientele and the competitors’ efforts.

They are not independent where there is bossing over them. These frequent ups and downs exhaust their stamina, vigour and, thus, they get bored, weary, and their level of performance drops down. Stimulation or motivation needs to be given to keep up their level of performance and ability.

(iii) To instill human treatment:

Man is not a machine where one can press the button to start and stop the work. He has feelings, sentiments, instincts-physical, psychological, spiritual, intellectual and social. The usual payment schemes or compensation plans satisfy his normal physical needs. The relationship between employers and employees should not be monetary or pecuniary for exchange of service or money. Money is not the only thing in life.

The performance of an employee is conditioned by the condition of his family. He cannot be expected to contribute his best, if his wife or mother is ill; even the disturbance caused by external factors can make the employee nervous, and he may not be able to work well. The incentives should account for non-financial aspects of his life where sympathy, recognition etc. have deeper effect than only fulfilling his physical needs.

(iv) Increase in efficiency:

When workers are motivated to satisfy their needs, they work to satisfy the organisational needs also. This increases the efficiency of organisational activities resulting in optimum utilisation of resources.

(v) Communication:

Motivation promotes communication between managers and workers. Both try to understand each other’s needs and satisfy them to the maximum possible extent.

(vi) Need-based motivation:

Managers find prime needs of the employees, physiological or psychological and try to fulfill those needs through motivation. Motivation, thus, satisfies personal needs of workers.

(vii) Combines ability with willingness:

Workers are sometimes able but not willing to perform organisational tasks, for lack of motivation. Effective motivation combines ability with willingness and maximises their potential to work.

(viii) Reduces labour absenteeism and turnover:

If workers are satisfied with their work and work environment, they contribute positively towards organisational goals and objectives. The rate of absenteeism and turnover gets reduced. This also provides job satisfaction and promotes self-discipline in the organisation.

(ix) Develops leaders:

Managers find the needs of employees and lead their behaviour in the right direction. Efficient leaders, thus, develop as a result of effective motivation.

(x) Overcomes resistance to change:

Motivated employees are less resistant to change as they understand the benefits of change. Change is the essence of management. Success is, thus, facilitated through a motivated work force.

(xi) Good industrial relations:

Low rate of absenteeism and turnover improves relations amongst the employer and employees. There is peace and discipline in the organisation. This promotes goodwill of the company and strengthens it ability to recruit qualified employees.

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5. Essay on the Factors to Make Motivation Effective:

To create and sustain self or inner-motivation (or to make the motivation process effective), managers consider the following factors:

(i) Development of self:

Before trying to develop others, managers develop themselves in the art and skill of motivation. A manager must analyse how well his behaviour can assist him in modifying the behaviour of others. Motivating employees, thus, helps in the development of managers.

(ii) Participation:

Self-motivation is a greater force than external motivation. If workers have ability, experience and willingness to take part in managerial decision-making, they should be allowed to do so to promote self-motivation.

(iii) Job enrichment and job rotation:

Making the jobs challenging and varied motivates the employees to accept those jobs.

(iv) Management by results:

Motivation enables employees to set objectives and compare their performance with the standards. Subordinates become result-oriented and feel motivated to achieve the targets.

(v) Realise human behaviour – Their motives and abilities:

Managers keep organisational objectives in mind while directing human behaviour. In creating an effective motivational environment, managers also keep in mind the abilities, motives and willingness of the subordinates to work and mould their behaviour to achieve the organisational goals. Subordinates realise that contribution to organisational goals will help them to achieve their personal goals also.

(vi) Create a suitable work environment:

A suitable environment or work culture should be created where workers feel motivated to achieve the goals. Congenial working conditions, harmonious superior-subordinate relationships, flexible working hours, neat and tidy work place motivate the workers.

(vii) Healthy criticism:

No human being is perfect. One learns through mistakes. If an employee commits mistakes, managers should not criticize him. Rather, they should sit with him, discuss the issues, solve them and explain how to manage that situation efficiently so that mistakes do not occur in future. If managers consult employees’ behaviour with them, it motivates them to work harder.

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6. Essay on the Approaches to Motivation:

Starting from the traditional approach of motivating by financial incentives to those who see work and job characteristics as more important factors than mere financial rewards.

Different approaches to motivation can be as follows:

1. Traditional approach,

2. Human relations approach,

3. Human resources approach, and 

4. Systems approach.

(i) Traditional approach:

This approach is based on Frederick Taylor’s scientific management school of thought. It is of the opinion that workers, by nature, are lethargic and non-innovative and are, therefore, interested in their jobs only to the extent of earning wages and salaries. Extra efforts are put only for financial rewards. Money is, thus, the motivator that makes people work.

If managers want workers to put extra efforts, they should provide them financial rewards. To maximise their income, workers would also be ready to put extra working hours. The proponents of this approach over-emphasise the role of monetary compensation and ignore the non-monetary factors that make people perform different jobs.

(ii) Human relations approach:

While strengthening their financial positions on working at formal positions, workers become part of the informal groups and get bounded by the norms and values of these groups. While carrying out the intentions of management (to maximise production), they also want their social needs and needs of being recognised by the peer group and superiors to be satisfied.

The human relations approach recognises this fact and attempts that workers make their own decisions and enjoy doing their jobs by creating an effective job environment. It makes the workers feel important and allows them to self-direct and control their activities.

The objective of the approach remains the same—makes the workers contribute towards organisational output; not by offering financial rewards alone but also by recognising their needs of social contacts and recognition. The human relations approach is based on Elton Mayo’s work at Western Electric Company.

It makes the workers feel they are important part of the organisation. They should participate in decision-making processes while decisions are more or less determined by the managers. Participation may be just symbolic gestures (real participation does not take place) but it motivates employees to perform better.

(iii) Human resources approach:

McGregor, Maslow, Likert and Argyris view that money and job satisfaction are not the prime motivators that promote organisational activities. According to them, satisfaction succeeds rather than precedes performance.

The human relations approach asserts that workers perform well because they are satisfied with their job content. The human resources approach, on the other hand, asserts when workers join a job, they do so with the intention of doing well, and their performance on the job gives them satisfaction.

This approach goes a step further in knowing the motivators and human needs that can be satisfied through them. It believes that human beings actually want to participate in the decision-making processes rather than seemingly being allowed to do so. It assumes that people want and are able to contribute towards organisational goals.

Managers and workers together discuss individual and organisational goals of the enterprise; both individuals and organisation should maximise each others’ interests and make optimum use of the human resource. The approach, thus, emphasises on the human being as a motivator to achieve goals of the organisation.

(iv) Systems approach to motivation:

Lyman Porter and Raymond Miles propagate the systems approach to motivation. According to them, “the entire set, or system, of forces operating on the employee must be considered before the employee’s motivation and behaviour can be adequately understood.”

A system, according to them, consists of three variables:

(a) Individual characteristics:

People join the same enterprise with different motives. Some may be interested in money while others in prestige and status. Depending on their needs and attitude towards work, suitable system of motivation should be adopted by managers.

(b) Job characteristics:

It presumes that workers are motivated to perform jobs which are challenging and enterprising while a job which is routine and repetitive with no growth opportunities is not motivating for them. This may not hold true for workers who work for financial benefits irrespective of the nature of job.

(c) Work situation characteristics:

It is important that organisation culture or work environment is healthy, harmonious and congenial. A work situation is motivating where people help each other, where promotions do not follow seniority but also merit, where good performance is appreciated and bad performance is not criticised but is improved upon, where workers are motivated through positive means of motivation.

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7. Essay on the Theories of Motivation:

Human behaviour, being complex in terms of needs-behaviour-action process, different motivational theories emphasise on these elements in a different perspective. People have different needs and perceptions about how they will satisfy those needs. All theories of motivation focus on these relationships (individual needs and perception about how to satisfy them) but in a different way.

Some of the important theories of motivation are:

1. Need Theories:

Need theories identify the needs that motivate a person to perform organisational activities. Need theories answer a simple question: “What motivates people to act?” They believe that individuals have various needs and they work to fulfill those needs.

Two of the popular need theories are discussed below:

I. Need Hierarchy Theory:

The need hierarchy theory is formulated by Abraham Maslow. He advocates a hierarchy of needs present in all individuals. At a point of time, his behaviour reflects his desire to satisfy the strongest need present in him. Once that need is satisfied, the next strongest need arises and he strives to satisfy that need.

Managers determine that need and adopt motivators to satisfy it. Though normally people satisfy their needs in the order of hierarchy, starting from lower-level to higher-level needs, they may not always follow this order. The potency or strength of a need depends upon each individual’s set of priorities.

Need hierarchy consists of five types of needs. These needs, in the order of priority are:

(a) Physiological needs

(b) Safety needs

(c) Social needs

(d) Ego needs

(e) Self-actualisation needs.

The first three needs (physiological, safety and social) are lower-order needs and next two needs (ego and self-actualisation) are higher-order needs.

(a) Physiological needs:

These are the basic needs that people want to satisfy. They are the need for food, clothing, shelter and other necessities of life. They are also known as survival needs. The strongest motivator that can satisfy these needs is money and a healthy work environment.

(b) Safety needs:

Full or part satisfaction of physiological needs arouses safety needs in an individual. These are the needs to remain free from external dangers of war, destruction, accidents etc. and internal dangers of losing the job and maintaining the standard of physiological needs.

Safety is an important consideration in selecting a job as people want their jobs to satisfy their safety needs. The motivators that satisfy these needs are the benefits of life insurance, provident fund, health insurance and other retirement benefits.

(c) Social needs:

Man is a ‘social animal’. He cannot live alone. While working in the formal structure of authority-responsibility relationships, he develops affection and respect for his superiors and fellow workers. He becomes part of informal groups in the organisation. In fact, the very formation of informal groups is based upon peoples’ desire to satisfy their social needs.

Man wants to share his thoughts and feelings with others and, therefore, interacts with them. He wants to love and respect others and be loved and respected by them. He develops the need for acceptance and belongingness with others. Motivators like harmonious relationships, good natured fellow workers and healthy work environment satisfy his social needs.

(d) Ego needs:

This is a higher-order need concerned with self-respect, self-worth, power and prestige and arises after satisfaction of the lower-order needs.

These needs are of two types:

(i) Self-ego:

It is the desire of a person to develop competence, power and independence. It is the need to be satisfied with one’s own performance. At the organisational level, managers can satisfy these needs by providing a good office layout and job titles.

(ii) Public ego:

Along with job-satisfaction and self-confidence, a person also wants others to recognise him. The desire for prestige is a dominant form of ego needs. Prestige is “a sort of unwritten definition of the kinds of conduct that other people are expected to show in one’s presence; what degree of respect or disrespect, formality or informality, reserve or frankness.” The non-financial motivators satisfy ego needs of employees, such as important and challenging jobs (requiring varied skills), prestigious job locations and autonomy to take decisions.

(e) Self-actualisation needs:

These needs inspire a person to develop to his maximum potential. They are placed at the top of the need hierarchy. There is strong desire for achievement and competence in every person which arises after other needs are satisfied. These are the needs of becoming what one wants to become. People with strong self-actualisation needs do not wait for things to happen; they make things happen.

The inner desire to become a doctor or engineer or professor or social reformer and actually becoming one is the satisfaction of self-actualisation need. Personal and professional growth and achievement are the motives that promote self-actualisation needs of a person. The motivators that satisfy self-actualisation needs are challenging jobs, opportunities for innovation and growth and participative decision-making.

The need hierarchy and motivators that satisfy the needs is shown in the following figure:

Maslow’s Need Hierarchy Features of Need-Hierarchy Theory:

The theory highlights the following features:

(a) People have a variety of needs. The motivation to work arises when they want to satisfy these needs. Unsatisfied needs are the motivation to work.

(b) Need satisfaction is a continuous process. On satisfaction of one need, other needs emerge.

(c) Satisfaction of lower-level needs is the foundation of the need hierarchy. Higher-level needs emerge on full or part satisfaction of these needs. A challenging and innovative job offer to an employee whose physiological needs are not fully satisfied may not get the desired output from him.

(d) Most individuals progress in the order of need hierarchy but this is not always true. The freedom fighters and social reformers, for example, have a strong desire to satisfy their self-actualisation needs even though their lower-order needs are not fully satisfied.

(e) Even if the hierarchy is followed, it is only part satisfaction of one need that arouses next need as important. The next need in order can have strong influence on human behaviour even before the lower need is fully satisfied.

The desire for money, for example, is always present in people. In fact the more one has, the more one wants. Money to a part extent can satisfy not only physiological needs but also safety, social and ego needs. It is, therefore, always on part satisfaction of one need that a person strives to satisfy the need next in order.

Critical Analysis:

The theory provides a background for managers to communicate with and understand the needs of the employees. It helps in devising a motivational plan to satisfy the needs and promote their performance. It explains why some people behave differently at different points of time and why same people behave differently at same point of time.

The cause of motivation; satisfaction of needs, seems to be quite logical, but the theory suffers from the following limitations:

(a) Managers cannot easily ascertain the needs that influence individual behaviour since needs keep changing from one to the other.

(b) There can be people whose higher order needs are stronger even though their lower level needs are not fully satisfied. For example, social reformers like Gandhiji or Mother Teresa and creative people like singers, artists, painters etc. have high desire for higher-order needs even though their lower-order needs are not substantially satisfied. The hierarchy does not, therefore, always hold good in practice. Maslow himself accepts this fact.

(c) It is not always true that at a point of time only one need influences the human behaviour. When a person joins a job, he wants to satisfy a combination of needs. Safety and physiological needs are normally wanted to be satisfied together as any job requirement.

(d) Part satisfaction is complex to understand. Workers of electricity company, for example, may find climbing the electricity poles, part of their routine while others may find it as threat to security. The level of satisfaction of a need is, therefore, difficult to understand. What is physiological need for one may be security need for another.

(e) Even on part or full satisfaction, any need does not cease to be a motivating factor. The need-behaviour-action is a continuous process and lower order needs, having been satisfied once, can be strong motivational forces again. Different needs, at a point of time, constantly interact and even overlap each other.

The needs are independent and overlapping at various points of time. Before one need fully disappears, the next higher-order need emerges. Thus, at a point of time, a person has many needs present in him, though in varying degrees.

While some needs are dominant, others are not. Therefore, when the intensity of a need decreases, it ceases to be a strong motivating factor for action. However, the need continues to influence human behaviour because of its overlapping nature.

(f) The need hierarchy is different for people belonging to different cultures; a fact which is ignored in the need hierarchy theory. The hierarchy does not exist in all people in the manner described by Maslow. There can be people who are not inspired to work for their ego and self-actualisation needs. Once their security or social needs are satisfied, the higher-order needs do not activate automatically. All people with same needs cannot be motivated by same motivators.

There is no direct cause and effect relationship between needs and behaviour. People with same needs can depict different behaviour and people with different needs can reflect same behaviour. For example, action to earn money can satisfy various needs – physiological (food), security (saving plans), social (club membership), ego (running an NGO) or self-actualisation (setting challenging targets). Though need hierarchy model has limitations, it is widely accepted by managers. It describes the generally accepted behaviour of employees based on their needs and motives.

The following conclusions are drawn by Porter and some other researchers:

“There is strong evidence to support the view that unless the existence needs are satisfied none of the higher order needs will come into play. There is also some evidence that unless security needs are satisfied, people will not be concerned with higher order needs. There is, however, little evidence to support the view that a hierarchy exists once one moves above the security level.”

II. Two-Factor Theory:

While Maslow’s theory is based on general observation of needs, the two-factor theory, formulated by Frederick Herzberg is based on actual research findings. Herzberg conducted interviews with 200 accountants and engineers of companies in the Pittsburgh area of the United States and asked them to describe their job experiences in terms of what they felt good or bad about their jobs.

He asked them two questions:

1. What factors make you feel satisfied with your work and motivate you to perform better?

2. What factors make you feel dissatisfied with your work and do not motivate you to perform better?

Herzberg categorized two sets of factors that provided satisfaction or dissatisfaction to employees as hygiene factors and motivators.

1. Hygiene factors:

These factors are insurance policies, retirement benefit plans, salary structure, bonus, job security, relationship with superiors, peer group and subordinates, working conditions, company’s policies and administration and supervision.

Herzberg found that presence of these factors provide no dissatisfaction to employees, that is, presence of these factors do not motivate the workers to perform better but their absence becomes a source of dissatisfaction. These factors are shown on a single continuum ranging from dissatisfaction (if they are absent) to no dissatisfaction (if they are present).

They are also called maintenance factors, dissatisfiers or extrinsic factors; maintenance, because they maintain the level of performance on the job and any increase beyond this level does not motivate the employees; dissatisfiers, because their absence dissatisfy the workers and deteriorate their performance; and extrinsic because they are related to the work environment (job context) and not to the job content.

Dissatisfaction is, thus, related to the environment in which people work. They are not part of the job but relate to the environment or conditions in which the job is performed. Thus, they are extrinsic to the job and are environmental factors.

“Extrinsic motivators are external rewards that occur apart from work, providing no direct satisfaction at the time the work is performed.” — Keith Davis. They have value only as they provide external rewards that accrue outside the job.

The hygiene factors appear on a continuum as follows:

2. Motivators:

These factors are related to the job content, like achievement, recognition, innovative projects, challenge, opportunities for personal growth and responsibility. Their absence provides no motivation but their presence provides high degree of motivation and job satisfaction.

They are also, therefore, called satisfiers. They do not lie outside the job. They are related to the job itself or the job content. They sire also known as intrinsic factors. Satisfaction is, thus, related to the job, and increase in these factors motivates the employees to do better.

“Intrinsic motivators are internal rewards that a person feels when performing a job, so there is a direct connection between work and rewards.” — Keith Davis

Motivation factors appear on a continuum as follows:

Based on hygiene and motivation factors, the process of motivation can be explained in two stages:

One, managers ensure there are sufficient hygiene factors (salary, bonus, security etc.) present on the job so that workers are not dissatisfied with their jobs. These relate to job conditions which dissatisfy employees when they are absent. Any further increase in these factors will not motivate them to improve their performance.

To motivate them, therefore, managers move to stage two, where they provide motivation factors, like recognition, achievement and challenging jobs to employees. Providing these factors or upgrading the job content provides satisfaction and develops employees to work towards organisational goals.

As their absence does not dissatisfy the employees, they are provided to build motivation and high job satisfaction. Hygiene factors must be present (though they do not motivate employees) to prevent dissatisfaction and motivation factors must be present to increase satisfaction and motivation.

Following are the points of difference between hygiene factors and motivators:

Critical Analysis:

Research findings of Herzberg have useful implications on motivation of employees. It provides useful insight to know what motivates the employees. Increase in salary, bonus and working conditions do not always motivate the employees to increase their efficiency. People want job satisfaction through job enrichment, job enlargement, recognition and challenge. Managers, therefore, have to make the job motivating rather than merely making it not dissatisfactory.

However, the theory has been found lacking on the following grounds:

(a) The findings are based on a small sample of 200 engineers and accountants. These findings are not representative of the general work force.

(b) Researches subsequent to Herzberg failed to produce results similar to those of the two-factor theory. The theory, thus, cannot be generalized. Other studies have shown different findings for same study.

(c) Though the theory holds good for people working at higher managerial levels, it may not apply to workers at the operative levels.

(d) The response from employees regarding the factors that influence their behaviour may not help in categorizing the factors as satisfiers or dissatisfiers. If employees do well, they attribute it to their achievements and if they do not do well, they attribute their failure to outside factors. This behaviour, perhaps made Herzberg formulate the theory where factors internal to the job were termed as motivators and those external to the job were termed as hygiene factors (or dissatisfiers).

(e) Some thinkers feel that factors affecting human behaviour should not be categorized as hygiene and motivational. There is only one set of factors that persuade or dissuade the people to work. Hygiene and motivational factors are the same though they lie on different ends of the continuum. As the level of satisfaction increases, the same set of factors which are initially motivators turn out to be dissatisfiers. Money or fringe benefits, for example, can initially be a motivator but constant increase in monetary incentives may no longer be a motivator to improve the performance.

(f) Distinction between dissatisfiers and satisfiers is not a general distinction; it is a matter of individual perception. Factors which are dissatisfiers for some may be motivators for others. For people working at lower levels, increase in salary may be a motivator but for those working at higher levels, it may be a hygiene factor.

Despite the drawbacks, the theory is widely used in the area of management. It has given insight into factors that managers should use to motivate the employees. Managers change the job design to make it rich and empowering so that job holders are motivated to work on the job. Change in job design can be brought through job enlargement and job enrichment.

Relationship between Maslow and Herzberg Models: Both the theories focus on needs of the individuals. While Maslow talks of hierarchical arrangement of needs, Herzberg does not arrange the needs in a sequential order. In Maslow’s theory, same set of factors are motivators when they are present on the job and dissatisfiers, when they are absent from the job. Herzberg formulated two sets of factors, motivators and dissatisfiers.

Maslow identifies potent needs in a human being and Herzberg specifies the factors that satisfy those needs. If managers know that physiological and safety needs are stronger than other needs at a point of time, they will provide hygiene factors on the job conditions so that workers are not dissatisfied with their jobs. If, however, their self-actualisation needs or needs for achievement and growth are stronger than other needs, managers provide motivators on the job.

Relationship between two theories can be understood through the following representation:

The figure indicates that physiological, safety, social and ego needs in part (achieved through family status and not personal development) can be satisfied through hygiene factors. Managers need to provide salary, bonus and good working conditions to avoid dissatisfaction on the job. The part of ego needs (which a person achieves not through family status but through competence and skills) and self-actualisation needs of achievement and growth can be satisfied through motivators on the job.

If managers identify the needs at a point of time, they determine the factors that will motivate people to fulfill those needs. If, on the other hand, they can identify the factors which motivate them to work, the needs to which these factors are related can be identified. If workers are more interested in salary than recognition, their physiological or safety needs are stronger than the higher-order needs.

III. ERG Theory:

This theory emerged as extension of Maslow’s theory. It is an alternative need theory called ERG theory which categorizes needs as lower-order and higher-order. It is formulated by Clayton Alderfer. The basis of this theory is the need hierarchy of Maslow. The five needs as specified by Maslow are clubbed into three in ERG need theory.

Alderfer found that there was overlapping in physiological, security and social needs and also in social, esteem and self- actualisation needs. The line of demarcation is so minute that he categorized the needs into three. These are: Existence needs, Relatedness needs and Growth needs. The theory is named after first three letters of these needs.

(a) Existence needs:

Physiological and safety needs of the need hierarchy are termed as existence needs. This is the basic need that individuals wish to satisfy. They have similar impact on the behaviour of people as asserted by Maslow.

(b) Relatedness needs:

These are similar to social needs of a person. They pertain to desire to belong to a group to share our cultural, ethical and social values. They also cover part of the ego needs acquired through status and relationship with others. They have great influence on our work behaviour also. As the existence needs are satisfied, fully or partially, people concentrate on their relatedness needs.

(c) Growth needs:

The ego acquired through personal development and self-actualisation needs are equated with the growth needs. The need for creativity, innovation and desire to make things happen in our internal and external environment reflect the desire of an individual to develop his overall personality. The full or part satisfaction of relatedness needs creates the potential in people to fulfill their growth needs.

Alderfer, while formulating this theory talks of two principles:

1. Satisfaction – Progression Principle and

2. Frustration – Regression Principle.

1. Satisfaction – Progression Principle:

According to this principle, as one need is satisfied, even if in part, it leads to progression, that is, satisfaction of other needs. People can also satisfy two needs at a time. Social needs and growth needs may be present in a person at the same point of time. As satisfaction of the lower-order need increases, it decreases in importance and is, therefore, replaced by another need. Thus, people progress to satisfy higher-order needs when their lower-order needs are satisfied.

2. Frustration – Regression Principle:

If people are not able to satisfy their growth needs, because of their inability or because their superiors do not cooperate with them, they will feel frustrated and regress to satisfy their needs of lower- order. Managers, therefore, provide motivators (to satisfy their growth needs) to avoid frustration and regression down the need hierarchy. This will be of interest to both, individuals and the organisation.

Relationship between need hierarchy and ERG theory can be represented as follows:

IV. Acquired – Needs Theory:

The acquired needs theory, formulated by David C. McClelland asserts that needs can be acquired through one’s life experiences. As Maslow puts it, “What a man can be, he must be.” On the basis of what one really wants to be, McClelland used a technique called Thematic Appreciation Test (TAT) where he made people write stories about certain vague pictures. He assessed these stories on the basis of perception of individuals about their three needs: need for achievement, need for power and need for affiliation.

1. Need for achievement:

It is “the desire to accomplish a goal or task more effectively than in the past.” People with high need for achievement take challenging and risky projects that aim at personal growth. They do not take simple projects, rather, they set difficult targets and goals for which they seek personal responsibility (for success or failure). They also wish to have immediate feedback on their actions so that corrective measures can be taken to check the deviations.

2. Need for power:

It is “the desire to be influential in a group and to control one’s environment.” The need for power is strongly reflected in the desire of a person to become a leader. He wants to influence the behaviour of others. He aims to seek status and position in the organisation. Such people are normally good conversationalists, speakers and demanding individuals.

The power can be:

(a) Personal power:

This is the power of people to influence others so that followers become loyal to them and have faith in their competence and skill. This may not necessarily be related to organisational goals.

(b) Institutional power:

The leaders having institutional power aim to maximise organisational goals rather than personal goals. They interact with people, organise individual efforts into group efforts and get them together to work towards successful attainment of organisational goals. They even sacrifice their personal interests in favour of organisational interests while exercising institutional power.

3. Need for affiliation:

This is similar to social needs of the need hierarchy. People with high needs for affiliation join organisations where they can form social groups, love and be loved by their group members and develop friendly relationships with others. People with need for achievement power also have some need for affiliation.

In fact, the needs for achievement and power are satisfied through affiliation or personal interaction of superiors with the peer groups and subordinates. Such people maintain cordial relationships in the organisation, have empathy towards others and helping attitude towards those in need.

McClelland argues that:

a. People with high achievement needs are normally good entrepreneurs but not good managers.

b. People with high affiliation needs emphasise more on socializing and making healthy inter-personal relationships rather than concentrating on organisational goals.

c. Those with high power needs (personal power) try to maximize personal goals at the cost of organisational goals and, therefore, are not good managers but people with high institutional power serve as good managers as they organise individuals into groups who focus on organisational goals.

A research conducted on these needs revealed the following facts:

a. Managers usually have high achievement and power needs and low affiliation needs.

b. As people at higher levels have by-far satisfied their achievement needs and grown their companies into large size.

Achievement needs are more prominent in: 

i. Executives of smaller companies as they want to grow further, and

ii. Middle and lower-level managers as they wish to rise further.

As progress is faster when people have high achievement needs, organisations should strive to develop these needs in the employees. However, such people are usually found low on affiliation needs. They believe in work from self and also others. They are, thus, less suitable to work in personnel departments unless they comparatively develop their affiliation needs also.

Successful managers should have the following need-profile:

1. Moderate need for achievement so that personal growth and organisational growth, both are compatible.

2. Moderate to high need for institutional power to concentrate more on organisational goals.

3. A minimum desired need for affiliation so that everyone works in a friendly environment towards organisational goals.

A manager who does not possess this need profile should develop it through training programmes which stimulate participants to set high goals, know their worth and learn from every day experiences. These programmes help in expanding business, set up new units, add new product lines and make more profits.

The following figure shows a comparative analysis of all the need theories:

2. Cognitive Theories:

According to cognitive theories, it is not the need that promotes action but perception about a particular situation that influences individual behaviour. Actions are affected by what people expect to achieve out of those actions. For example, if management frames a policy that those who produce 500 units every day will get a pay rise of 10%, people who want this pay rise will work to achieve this standard while those who do not want this increase will continue to work at the existing standards.

Expectations of promotion and praise, therefore, motivate people to meet the desired standards. If standards are not followed by rewards, workers will not be motivated to achieve the standards. These theories are also called process theories as they focus on the thought processes associated with motivation.

“These theories attempt to isolate the thinking patterns that we use in deciding whether or not to behave in a certain way.” Rather than emphasizing on the needs, they emphasise on expectations that people anticipate out of their behaviour. Need is, therefore, just one element in the thought process that motivates to act.

Some of the important process theories are discussed below:

I. Expectancy Theory:

The expectation theory of motivation was developed by Victor H. Vroom and later extended by Lyman Porter and Edward Lawler.

Both the theories are briefly discussed below:

(A) Vroom’s expectancy theory:

According to this theory, people expect to achieve some goals out of their actions and, therefore, feel motivated to perform those actions. Thus, people choose actions that are directed towards desired goals.

Vroom’s theory asserts that motivation is a product of valence and expectancy.

Motivation or Force = Valence x Expectancy

Force is the motivation that influences a person to behave in a specific manner.

Valence is the strength of an opinion that an individual holds about the outcome of his action. “It is the preference an individual places on an outcome.” It is the attractiveness of an outcome to the individual. Valence may be positive or negative depending on his preference for an outcome.

It ranges from -1 to +1. If he prefers attaining the outcome, his valence will be positive. Depending on the strength of preference for the outcome, valence shall vary between -1 to +1. If he prefers not to achieve the outcome, his strength of preference for behaviour leading to that outcome shall be negative. If he is indifferent towards the outcome, the valence shall be zero.

If the action of employee is followed by promotion, he will prefer doing that action. Since the outcome has positive value, valence will be +1. If his action results in transfer or demotion, he would avoid that outcome and therefore, place negative value to the outcome. The valence for the outcome is -1. If individual action is not affected by any outcome, a routine behaviour, for example, which is neither followed by promotion or demotion, the valence shall be zero (0).

Expectancy is a belief that the action will lead to outcome. It ranges from 0 to 1. If employee believes that his action will lead to outcome, his expectancy is 1 and if he believes his action will not lead to any outcome, the expectancy shall move towards zero.

There are two types of expectancies:

(a) Effort-performance expectancy:

It is the expectation that effort will lead to desired performance. It is “the individual’s perception of the probability that his or her effort will lead to high performance.” For example, an individual feels that if he works 2 hours overtime every day, he will be able to produce more. If the employee feels that his effort will lead to desired performance, he shall perform that task.

(b) Performance – outcome expectancy:

It is the expectation that if desired performance is achieved, it will be followed by a positive outcome. It is “the individual’s perception that his or her performance will lead to a specific outcome.” Outcome is “a consequence of behaviour in an organisational setting; usually a reward such as pay raise.” Greater the probability that performance will be followed by a positive outcome, greater will be the desire of the individual to perform that action.

In the above example, the employee shall put 2 hours of overtime every day only if he expects increase in his monetary incentives. If management does not give him benefit for producing more, his expectancy shall be zero (0) and he will not be motivated to perform that task.

The model, thus, states that the employee will be motivated to work if his efforts lead to positive performance which further leads to positive outcomes. Conversely, if the employee feels that his efforts will be followed by performance which will not be accepted by the superiors and, therefore, is not followed by any reward, he will not be motivated to perform that action.

If the valence or expectancy is zero or valence is not zero but negative, the individual will not be motivated to perform that action. If both valence and expectancy are positive, that is, employees place positive value on performing a set of actions, they will be motivated to perform those actions.

The model can be depicted as follows:

Critical analysis:

The model motivates behaviour in a particular direction only if the behaviour (effort) is followed by performance acceptable to managers and further followed by rewards. There is, thus, harmonisation of individual goals with organisational goals.

Rather than focusing on the needs as a source of motivation, the outcome of behaviour or action is the source of motivation. Managers, therefore, provide work environment where people feel motivated to perform, synthesizing individual goals with organisational goals.

Though conceptually sound, the model suffers from the weakness that managers cannot easily ascertain employees’ expectancy and valence in mathematical terms. The model is, therefore, too complicated to apply in practice.

(B) Porter-Lawler expectancy theory:

Porter -Lawler theory believes that job satisfaction does not lead to better performance but job performance (increased production or sales) leads to job satisfaction. The theory asserts that effort to perform a task is affected not only by the outcomes of performance or rewards, but also ability to perform that task and understanding of the job.

If a person feels he is able to perform a task, he does so in the expectation of a reward (intrinsic or extrinsic). The expected rewards are compared with actual rewards and if he is satisfied with the rewards, his satisfaction will increase and he will be motivated to perform better in future but if he is not satisfied with the rewards, his satisfaction will go down, perception about future rewards will go down and motivation to perform better in future will also go down.

If performance brings rewards to employees, it will provide them job satisfaction and motivation to perform better. The managers should, therefore, clearly assess the reward system so that effort-performance- reward process leads to high performance by employees.

The theory is, thus, based on the following elements:

i. Efforts

ii. Performance

iii. Rewards

iv. Satisfaction

i. Efforts:

It is the energy exercised by the employee in performing the task. A person puts efforts in performing a task depending upon the rewards he expects to earn out of that performance.

ii. Performance:

Efforts lead to performance. However, performance also depends upon a person’s ability to perform that task. If a person is not fully able to perform a specific task, his efforts may not lead to desired performance.

iii. Rewards:

Performance leads to rewards. Rewards can be:

— Extrinsic: related to working conditions

— Intrinsic: related to inner satisfaction of achievement.

Both these rewards are essential for a person to derive satisfaction from work. Managers therefore, ensure sufficient intrinsic and extrinsic motivational incentives to promote efficiency at work.

iv. Satisfaction:

Satisfaction is derived from rewards that a person perceives to earn out of efforts exercised towards performance.

If actual rewards are more than or equal to perceived rewards, a person will be satisfied and motivated to work.

If actual rewards are less than perceived rewards, he will be dissatisfied and demotivated to work.

Satisfaction and, thus, motivation is dependent not only on rewards but also on performance rather than performance being dependent on satisfaction.

Managers should, thus, well plan their reward structure and effort —> performance —> reward —> satisfaction system should be an important part of the overall management.

II. Equity Theory:

This theory is formulated by J. Stacy Adams. According to him, people compare rewards of their performance with the rewards their fellow workers get for similar performance. Rewards are the outcomes of a person’s performance measured in terms of pay, promotion, recognition, security etc. Performance is the input of a person measured in terms of knowledge, skill, ability, education, time and competence.

This theory is based on social exchange process where people maintain fairness of relationship between their performance (inputs) and rewards (outcomes) by comparing it with that of others. After comparing rewards in relation to his inputs with those of others, they judge the fairness of the rewards received.

The relationship between inputs and outcomes of one person and inputs and outcomes of another person is mathematically expressed as follows:

Three situations can be perceived by an individual:

(a) The rewards he receives as a result of his inputs may be equal to the rewards that another person receives for his inputs (L.H.S. = R.H.S.). This is a situation of equitable reward and people feel satisfied in such situations and continue to work according to present standards.

(b) The reward he gets is less than what other person gets for similar performance (L.H.S. < R.H.S.). This is a situation of inequitable reward. It dissatisfies the employee, demotivates him to work and he may lower his performance. He may even change the behaviour of his fellow workers to restore equity in rewards. In extreme situations, he may even quit the organisation.

(c) The reward that the person gets for his inputs is more than (L.H.S. > R.H.S.) what others are getting for the same input. Either the worker works hard to overcome the feeling of being paid more than his co-workers for the same performance or in some situations, he may even discount the rewards.

Managers should be careful while rewarding similar performance of different workers because inequitable rewards can lead to dissatisfaction and frustration amongst those who are not equitably rewarded. This may lead to sub-optimal attainment of goals.

There should be equal pay for equal work as equity in pay is a strong motivator for people to work. Equity is more of a perception than actual pay. People emphasise on monetary part which is based on a number of job components. Two jobs which appear similar may not actually be so on account of some hidden factors. It is, thus, difficult to assess the perception of people about outcome/input relationship.

III. Goal Setting Theory:

Edwin A. Locke and Gary P. Lathman assert that setting of goals can also be a motivational factor affecting the human behaviour. If goals are attainable, measurable and challenging, people will be motivated to work towards the attainment of goals. When people feel committed to organisational goals, they are motivated to achieve those goals and also associate their hard work with returns and rewards.

3. Reinforcement Theory:

Reinforcement theory is formulated by the behavioural psychologist, B.F. Skinner. According to him, past actions and their outcomes influence the present and future actions. Past behaviours associated with positive outcomes are repeated in future and behaviours associated with negative outcomes are not repeated. People tend to avoid behaviours with unpleasant memories.

The behaviour of a person, therefore, is not motivated by his inner needs and desires but by the external environment. People perform tasks that have earlier led to desirable outcomes and avoid performing tasks that have led to undesirable outcomes. The future behaviour is, thus, reinforcement of the past outcomes.

Managers motivate the employees by creating an effective work environment. They praise good performance so the performance is repeated in future. Even in case of poor performance, managers do not straightaway condemn them; rather, they explain the reasons for poor performance and motivate them to perform better in future.

An action of condemnation by managers may result in frustration and employees may not repeat their behaviour in future. Managers must, therefore, solve the problems of workers through effective communication and feedback of performance. This will reinforce employee behaviour in future.

Four kinds of reinforcement can result from employees’ behaviour:

1. Positive reinforcement:

If managers want behaviour to be repeated, they use positive reinforcers like rewards and praise. When they praise or give pay rise for desired behaviour, it positively reinforces that behaviour in future. A positive reinforcement is, therefore, a method of strengthening behaviour by offering rewards for good performance.

2. Negative reinforcement:

Managers reinforce specific behaviour by avoiding or eliminating the outcomes that employees feel are undesirable. If employees do not want to be criticised in front of others for performing negative behaviour, managers should explain to them the reasons for their failure when they are alone and not in front of their co-workers.

3. Extinct behaviour:

If managers do not want a behaviour to be repeated, they will either ignore it or condemn it. Employees normally do not repeat behaviours followed by negative outcomes or no outcomes. Extinction is, thus, used to weaken the behaviour.

4. Punishment:

This also aims to weaken the strength of a behaviour. If an employee takes up a fight with his co-workers or comes to office late every-day, he will be punished by his managers, say, by deducting one day’s salary. This action indicates that he should not fight with anyone or come late to the office.

He, therefore, restrains his negative behaviour in future. While positive and negative reinforcement strengthen the behaviour, extinct behaviour or punishment weaken the strength of a behaviour.

Future behaviour affected by the outcomes of past behaviour can be shown as follows:

According to W. Clay Hamner, the following guidelines reinforce behaviour through positive reinforcement:

(a) Do not reward all employees equally:

Reward must be according to performance. Those who perform better should be rewarded more than those whose performance is average or sub-average.

(b) Do not respond to certain behaviour:

If managers do not want a behaviour to be repeated, they should simply ignore it.

(c) Tell employees what they can do to get positive reinforcement:

Managers should frame standards and guide employees’ behaviour to avoid poor performance.

(d) Tell employees why they have not been rewarded:

Rather than just not rewarding the employees, they should be explained about what went wrong and where and why the rewards have been withheld.

(e) Do not punish in front of others:

Even if managers want to punish the employees, they should not do so in front of others as this can cause frustration and resentment amongst them.

(f) Be fair to all:

Rewards must be given to those who deserve them. Giving rewards to non-deserving employees and not the deserving ones will fail to reinforce the behaviour.

Though this theory has produced desirable outcomes in many organisations, it has been criticised on the following grounds:

(a) It is believed to ignore social interaction amongst employees.

(b) It over emphasises external rewards and overlooks internal (intrinsic) factors that provide job satisfaction to employees.

4. Behavioural Theories:

The nature of individuals and how they behave in different situations forms the basis for motivation in the behavioural theory.

Two important theories that deal with human behaviour are discussed below:

I. Theory X and Theory Y:

This theory is formulated by Douglas McGregor. McGregor, in his work ‘The Human side of Enterprise’ wrote: “The theoretical assumptions management holds about controlling its human resources determine the whole character of the enterprise. They determine also the quality of its successive generations of management.” His theory is based on assumptions relating to human behaviour.

These assumptions differ depending upon the factors that affect human behaviour and help managers in adopting suitable motivators to satisfy their behavioural requirements. His theory is based on two sets of assumptions about human behaviour which help in adopting motivators for them. One set of assumptions is called Theory X and the other set of assumptions Theory Y.

Theory X:

Theory X assumes that people by nature are lazy, dislike work, do not want to assume responsibility, work only if directed and are very little or not ambitious about achieving their higher-order needs. They only want to fulfill their primary needs of food, clothing, shelter and security. Motivators like money and fringe benefits (insurance etc.) make them contribute to organisational goals.

The assumptions of Theory X are:

(a) Managers organise and integrate various human and physical resources to achieve economic goals of the enterprise.

(b) Workers are, by nature, lazy and like to work as little as possible.

(c) They lack ambition, avoid responsibility and work only if directed to work.

(d) They want to satisfy individual goals and are indifferent towards organisational goals.

(e) Managers direct, motivate, control and modify human behaviour to meet the organisational goals.

(f) People are resistant to change and want to work in stable conditions.

(g) Their lower-order needs are stronger than higher-order needs.

(h) Workers work through rewards, punishments and coercion. If managers do not persuade them to work, organisational goals will not be achieved.

This is a pessimistic approach of human behaviour. It provides rigid control, close supervision, one way communication and autocratic style of leadership for motivating human beings. The theory defines management as the art of getting things done by following the carrot and stick approach.

Theory Y:

The other view held by managers about the nature of people is opposite to that of Theory X. McGregor felt that as people work in the organisation, their lower-order needs get satisfied over a period of time and they look forward to satisfy their higher-order needs of ego satisfaction and self-actualisation. They want to take part in decision-making processes, accept challenging jobs and work on lucrative and innovative job conditions.

They are, therefore, self-directed to contribute towards organisational goals. They aim to maximise both personal and organisational goals. They integrate individual goals with organisational goals. They do not only accept responsibility, they seek it from superiors to satisfy their needs of acknowledgement, creativity and innovation.

Basic assumptions underlying Theory Y are:

(a) Managers organise various organisational resources to achieve economic ends of the enterprise. (This assumption is similar to that of Theory X)

(b) Workers are not lazy. They have the potential to develop and readiness to work. Managers recognise these abilities and exploit them for the benefit of individuals and organisations.

(c) People are ambitious. Not only do they accept responsibility, they seek it from managers.

(d) Motivation does not come from outside. People are self-directed and self-motivated to work towards organisational goals.

(e) Managers create an environment where individuals integrate personal goals with organisational goals.

(f) People are not resistant to change. They are imaginative and creatively solve organisational problems in the turbulent, dynamic environment.

(g) Workers strive to satisfy their higher-order needs through self-direction, self-control and participative styles of leadership.

(h) Rewards are non-financial in nature. They promote recognition and achievement.

Theory Y, thus, holds optimistic view about human nature where people integrate their goals with corporate goals. Motivators like recognition, praise, admiration, participative style of leadership, two way communication and challenging job opportunities motivate people to work.

Critical Analysis:

McGregor’s theory is simple and logical to understand. It helps managers adopt motivators to satisfy human behaviour. However, both sets of assumptions about human nature in Theory X and Theory Y are not found in actual management practices.

The theory is criticised on the following grounds:

(a) People who want to satisfy physiological and safety needs (lower-order needs) do not always react to external direction and control as motivators to work. The carrot and stick approach of rewarding good performance and punishing poor performance may not always work as described in Theory X.

(b) Assuming that people holding high spirits for self-actualisation are always independent, self-directed and self-motivated is also not correct. There are situations where people belonging to Theory Y prefer to be directed by the superiors and financial motivators motivate them to work. Self-directed employees who want to develop in a short time­frame do not react negatively to external control and supervision. Theory Y is, thus, an over-optimistic approach used to motivate the employees.

(c) Theory X assumes that workers satisfy their needs off-the-job (the facilities that money can buy can be enjoyed outside the work place) and Theory Y assumes that workers satisfy their higher-order needs on-the-job. These assumptions may not always hold true. Satisfaction can be derived by workers on-the-job and off-the-job. Theory Y, thus, over emphasis “the importance of satisfying higher-level needs in the work place.” Off- the-job interactions and family status can also contribute to their need satisfaction.

(d) No person can completely fit into Theory X or Theory Y assumptions. Both the theories should be viewed as two ends of the continuum. Behaviour of most of the people lies between the two ends.

People have characteristics of both the theories with varying emphasis at different points of time.

(e) These theories are based on assumptions and not actual research findings. The assumptions may not always hold good.

Though McGregor’s assumptions are criticised, the following points help to understand the theory and avoid its misinterpretation:

(a) Theory X and Theory Y are only two sets of assumptions about human nature not based on empirical findings. Rather than following these assumptions blindfold, managers should test them against reality and formulate the management strategies.

(b) Theory X does not mean ‘strict management’ and Theory Y does not mean ‘soft management’. Soft management can be effective in Theory X assumptions as in case of Theory Y assumptions. Managers should recognise the abilities of subordinates and adopt the appropriate management style. The two theories are, therefore, situational in nature.

(c) The theories should not be seen as lying on two ends of the same continuum (as asserted by critics). There are two sets of assumptions about human nature which should be followed independently.

(d) Adopting Theory X or Theory Y is only a matter of fitting task requirements to people and the situation. Strict use of authority and structure may be effective for certain tasks and ineffective for others. Managers should, therefore, look beyond the assumptions of two theories and adopt a managerial style that best fits the situation.

II. Theory Z:

This theory is developed by William Ouchi He studied the Japanese management style because of the rising success of Japanese companies and focused on Japanese managerial practices that could be adopted by companies in the United States. He made comparative analysis of Japanese and the US-based companies, analysed the way the Japanese and the US managers managed their companies and concluded that most of the successful companies in America had integrated the Japanese style of management with the American style of management.

Theory Z is, thus, not an independent theory but a hybrid theory of management which incorporates the features of both Japanese and American managerial styles. This theory is “a concept that combines positive aspects of American and Japanese management into a modified approach aimed at increasing US managerial effectiveness while remaining compatible with the norms and values of American society and culture.”

Ouchi studied the following features relevant to the Japanese and American companies:

Features of Theory Z:

Theory Z, which combines the positive aspects of Japanese and American styles of management, highlights the following features of an effective style of management:

1. Employment:

Theory Z focuses on the Japanese style of long-term employment. Various financial and non-financial incentives should be promoted to retain employees in the organisation during sound and adverse conditions. This promotes strong bond between organisation and the employees. This also requires a congenial work environment where people derive satisfaction from work. Losses should be shared by owners and shareholders rather than resorting to lay offs.

2. Control processes:

The theory focuses on implicit, informal control and some explicit, formal measures of control. Control processes should be informal based on mutual confidence and cooperation. Rather than following a strict procedure of control, it is based on personal judgment and thinking; though some degree of formal control measures should be present.

3. Decision-making:

Decision-making should be participative. Since decisions are implemented by subordinates, they should participate in the decision-making processes. There should be free flow of information for consensus in decision-making and their effective implementation. Employees’ involvement promotes commitment to decisions. Since all the decisions cannot be taken jointly, decisions taken by management should be duly communicated to employees to strengthen the bond between the employers and employees.

4. Responsibility:

Theory Z focuses on individual responsibility. Every individual should be responsible for his acts; all individuals should not be collectively responsible as a group.

5. Concern:

The focus is on holistic concern. Superiors and subordinates should develop mutual trust and confidence and work as a team towards the organisational goals. People are viewed as human beings, not as mere factors of production. Despite the democratic and informal relationships based on trust, the hierarchical structure remains intact where rules, authority and discipline (corporate philosophy and values) guide managerial actions and corporate behaviour.

6. Promotion:

The emphasis is on slow evaluation and promotion. Promotions should be relatively slow. They should be based on skill and performance rather than time. Performance- bound promotions are preferred to time-bound promotions.

7. Careers:

The theory advocates a moderately specialised career path between the specialised and non-specialised career paths. It focuses on developing the human resource through job enlargement and job enrichment. Managers should train them for growth and development.

As slow promotion brings saturation in growth, there should be horizontal movement of employees. Movement in different jobs reduces stagnation. Frequent involvement with superiors on different jobs and projects are the non-financial incentives that make up for the loss of financial incentives on account of slow promotions.

The following table highlights the integration of American and Japanese styles of management into Theory Z:

Merits of Theory Z:

Theory Z has the following merits:

(a) Theory Z aims at the best style of management by combining the Japanese and American styles of management. It is inclined more towards the Japanese style of management and aims at promoting inter-personal skills required for group interaction,

(b) It aims to transform attitudes of employees towards work and the organisation as a whole, keeping in view the organisational goals. It promotes workers’ contribution to their maximum potential.

(c) It develops trust, confidence, cooperation and intimacy amongst managers and employees.

i. Trust reduces conflicts and builds teamwork.

ii. Confidence builds the desire to work.

iii. Co-operation promotes sensitivity towards others and disciplined thinking.

iv. Intimacy builds relationships and support.

(d) It provides job security and broader career paths to workers. It shows great concern for employees for promoting formal goals of the organisation.

(e) Though all individuals are collectively involved in decision-making, the theory holds individuals responsible for their acts. Individual responsibility is preferred over collective responsibility.

(f) Gradual advancement policies and setting informal control processes increases the quality of work. It also helps the workers to sell-direct and control their activities.

Theory Z is, thus, called a comprehensive philosophy of management. Though so called, the theory is not free from limitations.

Limitations of Theory Z:

This theory suffers from the following limitations:

(a) It is difficult for organisations and employees to make life-time employment commitments. Employees would like to move to organisations which provide them better job opportunities and so would organisations welcome employees with better job aptitudes and skills. Though life time employment provides job security, it may promote lethargy amongst employees. Employees may not work to their maximum potential as their jobs and promotions are secured and promotions are slow.

(b) The Japanese style of management proved to be successful in the US-based companies but companies established worldwide may not be benefitted by combining their management styles with the Japanese managerial styles.

(c) Participative style of decision-making does not always work well. While managers invite workers to participate in the decision-making processes, workers may not always be willing to do so. Managers also may not always appreciate collective decision-making. They may like to take certain decisions unilaterally and not collectively.

(d) Features like slow promotions, group decision-making and life-time employment may not fit well into companies operating in different cultural, social and economic backgrounds.

(e) Horizontal movement requires different job skills which may not be feasible. Though contemporary organisations are characterised by cross functional boundaries, specialisation has its own role to play which comes through vertical movement. Theory Z, therefore, is not the last word on management.

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